Per new analysis, the average earner in the UK would have to work 52 years' worth of income to reach the financial standing of the most affluent 10% nationwide.
Expanding Financial Divide Across Decades
The analysis reviewed wealth distribution statistics including the Covid pandemic period and discovered that during the pre-financial crisis era, it would have taken 38 years' worth of median full-time earnings to enter the top 10th of the financial hierarchy.
A research lead involved with the study commented: "Financial divides in Britain are presently so substantial that a typical full-time employee accumulating their complete salary throughout their career would still not be able to reach the top of the wealth ladder."
Measuring the Economic Gap
The study found that the difference between the assets of the average person and an individual in the top 10% was £1 million in the pre-crisis period, but had widened to 1.3 million pounds in inflation-adjusted terms by recent times.
The economist continued: "These gaps are doubly concerning as wealth mobility in Britain is limited – people that start life well-off tend to stay wealthy, and vice versa."
Relative Wealth Inequality
Although the economic divide growing in specific figures, the portion of overall assets in the UK possessed by the richest households – known as "comparative financial divide" – has been "mostly consistent since the eighties," according to the study.
Throughout these years, total wealth in the UK surged from triple the annual GDP, to nearly seven and a half times.
Drivers of Economic Disparity
Termed "automatic" appreciation, through increasing property values and changes in pension valuations, were the key contributors of the widening wealth gap over the past decade, as stated in the study.
These appreciations typically went to senior citizens with real estate, the research shows – worsening the generational financial disparity.
Age-Based Financial Divides
The median economic difference between people in their early 30s and people aged 60-64 increased over twofold in real terms, from 135 thousand pounds in 2006-08, to £310,000.
Regional Differences
There were also stark regional variations, with the average level of assets in 2020-22 reaching 290 thousand pounds in the SE of England, where real estate values have tended to rise rapidly, compared with 110 thousand pounds in the north-east.
COVID Era Consequences
During the pandemic, when numerous employees were covered under the public-funded employment protection, and Covid shutdowns limited opportunities for spending, the data shows numerous families were in a position to set aside money, growing their net worth.
More affluent homes fared much better, however. "The typical family in the lowest-income quintile saw their cash reserves rise by merely £80 throughout the health crisis (from 2019 to 2022), roughly identical to the 24 months before COVID. In contrast, the average household in the wealthiest fifth saw their cash reserves grow by 4,200 pounds," the report finds.
