Per new study, the typical worker in the UK would need over five decades of income to achieve the financial standing of the wealthiest 10% of the population.
Growing Economic Disparity Over Time
The study examined financial assets statistics including the recent health crisis years and determined that during the mid-2000s, it would have needed 38 years' worth of median full-time earnings to join the top 10th of the economic ladder.
A research lead involved with the report commented: "Economic disparities in Britain are presently so substantial that a regular employee setting aside their entire income throughout their career would still not be able to achieve the peak of the wealth ladder."
Measuring the Economic Gap
The study found that the difference between the net worth of the typical individual and a person belonging to the top 10% was one million pounds in the mid-2000s, but had increased to 1.3 million pounds in actual value by the pandemic years.
The researcher further stated: "These differences are doubly concerning as wealth mobility in Britain is low – individuals who begin life affluent tend to continue being rich, and vice versa."
Proportional Economic Disparity
Even with the economic divide widening in actual numbers, the share of total wealth in the UK possessed by the most affluent homes – known as "comparative financial divide" – has been "mostly consistent since the eighties," per the research.
Over this timeframe, total wealth in the UK increased dramatically from thrice the gross domestic product, to nearly seven and a half times.
Contributors of Economic Disparity
Referred to as "passive" gains, via rising house prices and changes in retirement fund assessments, were the primary factors of the expanding economic divide over the past decade, as stated in the report.
These appreciations typically went to older, property-owning households, the study demonstrates – worsening the intergenerational wealth divide.
Generational Wealth Disparities
The average wealth gap between thirty-somethings and people aged 60-64 more than doubled in inflation-adjusted terms, from £135k in 2006-08, to £310k.
Regional Variations
Furthermore, the study revealed significant regional variations, with the median value of net worth in 2020-22 amounting to £290k in the SE of England, where housing costs have tended to rise rapidly, compared with £110k in the northeastern region.
Health Crisis Years Impact
During the pandemic, when millions of workers were supported by the taxpayer-backed furlough scheme, and pandemic lockdowns limited opportunities for spending, the statistics indicate numerous families were able to save, growing their net worth.
More affluent homes performed significantly better, however. "The typical family in the poorest fifth saw their liquid savings grow by only eighty pounds over the pandemic period (across the pandemic timeframe), roughly identical to the pre-crisis period. In contrast, the typical family in the top income bracket saw their available funds rise by £4,200," the study reveals.
