According to recent research, the average worker in the UK would have to work over five decades of salary to reach the wealth level of the wealthiest 10% nationwide.
Widening Economic Disparity Over Time
The study examined wealth distribution data from the recent health crisis years and found that during 2006-08, it would have taken 38 years' worth of average worker salary to join the top 10th of the economic ladder.
A senior economist involved with the report commented: "Financial divides in Britain are presently so substantial that a typical full-time employee accumulating their complete salary across their entire working life would continue to be incapable to achieve the peak of the wealth ladder."
Measuring the Wealth Divide
The research revealed that the gap between the net worth of the average person and someone in the top 10% was one million pounds in the mid-2000s, but had widened to 1.3 million pounds in actual value by recent times.
The economist further stated: "These gaps are particularly worrying as economic movement in Britain is low – people that start life wealthy tend to remain affluent, and conversely applies."
Relative Wealth Inequality
Even with the financial disparity growing in actual numbers, the portion of overall assets in the UK held by the richest households – known as "proportional economic disparity" – has been "largely unchanged since the 1980s," per the study.
Over this timeframe, total wealth in the UK increased dramatically from thrice the gross domestic product, to approximately 7.5x.
Factors of Economic Disparity
So-called "automatic" gains, through increasing property values and adjustments to superannuation evaluations, were the primary factors of the expanding economic divide over the past decade, according to the analysis.
These appreciations typically went to senior citizens with real estate, the study demonstrates – worsening the intergenerational wealth divide.
Age-Based Financial Divides
The median economic difference between thirty-somethings and those in their early 60s increased over twofold in real terms, from £135,000 in 2006-08, to 310 thousand pounds.
Geographic Variations
Furthermore, the study revealed significant geographic differences, with the average level of wealth in recent years reaching £290,000 in the SE of England, where property prices have typically increased quickly, as opposed to 110 thousand pounds in the NE of England.
Health Crisis Years Effects
During the pandemic, when numerous employees were covered under the public-funded employment protection, and Covid shutdowns limited opportunities for spending, the data shows many households were in a position to set aside money, growing their net worth.
Higher-income households performed significantly better, however. "The average household in the poorest fifth saw their available funds grow by only eighty pounds during the COVID years (across the pandemic timeframe), approximately equivalent to the pre-crisis period. In contrast, the median home in the highest income quintile saw their available funds grow by 4,200 pounds," the study reveals.
