According to fresh analysis, the typical worker in the UK would require over five decades of salary to reach the wealth level of the wealthiest 10% of the population.
Growing Wealth Gap Through the Years
This research examined financial assets statistics including the 2020-22 timeframe and determined that back in the mid-2000s, it would have required nearly four decades of average worker salary to enter the wealthiest decile of the wealth distribution.
An economic expert part of the analysis observed: "Wealth gaps in Britain are now so large that a typical full-time employee accumulating their complete salary across their entire working life would still not be able to reach the top of the financial hierarchy."
Assessing the Wealth Divide
The research discovered that the disparity between the assets of the median citizen and a person belonging to the top 10% was £1 million in the mid-2000s, but had increased to £1.3 million in real terms by recent times.
The researcher continued: "These disparities are doubly concerning as financial progression in Britain is low – those who commence life affluent tend to stay wealthy, and vice versa."
Proportional Economic Disparity
Although the financial disparity widening in absolute terms, the share of total wealth in the UK owned by the most affluent homes – termed "relative wealth inequality" – has been "largely unchanged since the eighties," as stated in the study.
During this period, total wealth in the UK increased dramatically from triple the gross domestic product, to approximately 7.5x.
Contributors of Wealth Inequality
Termed "passive" gains, via increasing property values and variations in pension valuations, were the primary factors of the growing financial disparity over the past decade, according to the analysis.
These gains typically went to older, property-owning households, the analysis reveals – worsening the intergenerational wealth divide.
Intergenerational Wealth Disparities
The average wealth gap between thirty-somethings and those in their early 60s more than doubled in real terms, from £135,000 in pre-financial crisis, to 310 thousand pounds.
Regional Disparities
Additionally, there were significant regional variations, with the typical amount of wealth in 2020-22 standing at £290k in south-east England, where real estate values have generally grown substantially, as opposed to £110k in the NE of England.
Pandemic Period Impact
During the pandemic, when countless laborers were covered under the public-funded employment protection, and Covid shutdowns reduced expenditure possibilities, the data shows many households were in a position to set aside money, increasing their wealth.
More affluent homes fared much better, however. "The typical family in the lowest-income quintile saw their cash reserves rise by merely £80 during the COVID years (2019-20 to 2021-22), broadly the same as the 24 months before COVID. On the other hand, the typical family in the highest income quintile saw their liquid savings grow by 4,200 pounds," the analysis concludes.
