According to fresh study, the typical employee in the UK would have to work half a century of salary to achieve the net worth of the wealthiest 10% of the population.
Growing Economic Disparity Across Decades
This research reviewed wealth distribution data including the recent health crisis years and determined that back in the mid-2000s, it would have taken 38 years' worth of average worker salary to join the top 10th of the economic ladder.
An economic expert associated with the analysis commented: "Financial divides in Britain are now so large that a regular employee setting aside their entire income throughout their career would remain unable to achieve the peak of the financial hierarchy."
Assessing the Economic Gap
The study found that the disparity between the assets of the average person and a person belonging to the richest segment was one million pounds in the pre-crisis period, but had increased to £1.3 million in actual value by recent times.
The analyst continued: "These differences are particularly worrying as wealth mobility in Britain is limited – people that start life wealthy tend to stay wealthy, and vice versa."
Proportional Economic Disparity
Although the economic divide widening in actual numbers, the portion of overall assets in the UK held by the wealthiest families – termed "comparative financial divide" – has been "largely unchanged since the 1980s era," per the analysis.
During this period, total wealth in the UK surged from triple the annual GDP, to approximately 7.5x.
Contributors of Economic Disparity
So-called "passive" gains, by means of growing real estate costs and changes in superannuation evaluations, were the main drivers of the growing financial disparity from 2010 onward, according to the analysis.
These gains generally flowed to senior citizens with real estate, the research shows – exacerbating the intergenerational wealth divide.
Generational Wealth Disparities
The typical financial disparity between thirty-somethings and those in their early 60s more than doubled in real terms, from £135k in pre-financial crisis, to £310k.
Area-Based Disparities
Furthermore, the study revealed pronounced area-based disparities, with the median value of net worth in 2020-22 standing at 290 thousand pounds in the southeastern region, where housing costs have generally grown substantially, versus 110 thousand pounds in the northeastern region.
Pandemic Period Consequences
Amid the health crisis, when millions of workers were supported by the government-supported job retention program, and health crisis restrictions reduced expenditure possibilities, the statistics indicate numerous families were in a position to set aside money, increasing their wealth.
Wealthier families fared much better, though. "The average household in the poorest fifth saw their available funds increase by just £80 over the pandemic period (from 2019 to 2022), approximately equivalent to the 24 months before COVID. On the other hand, the average household in the wealthiest fifth saw their liquid savings grow by 4,200 pounds," the study reveals.
