Per fresh study, the average employee in the UK would need half a century of income to achieve the wealth level of the richest 10% in the country.
Widening Economic Disparity Over Time
This research examined net worth statistics covering the Covid pandemic period and determined that back in the pre-financial crisis era, it would have taken 38 years' worth of typical employment income to reach the top 10th of the economic ladder.
A research lead part of the study observed: "Economic disparities in Britain are presently so substantial that a average worker setting aside their entire income across their entire working life would remain unable to reach the top of the financial hierarchy."
Assessing the Economic Gap
The research found that the difference between the wealth of the typical individual and an individual in the wealthiest decile was one million pounds in the mid-2000s, but had expanded to £1.3 million in actual value by 2020-22.
The researcher continued: "These gaps are doubly concerning as economic movement in Britain is limited – those who commence life wealthy tend to stay wealthy, and conversely applies."
Relative Wealth Inequality
Even with the wealth gap growing in absolute terms, the portion of complete net worth in the UK held by the richest households – called "relative wealth inequality" – has been "mostly consistent since the 1980s," per the analysis.
Over this timeframe, complete net worth in the UK surged from three times the annual GDP, to nearly seven and a half times.
Factors of Financial Divide
Termed "automatic" gains, through growing real estate costs and changes in retirement fund assessments, were the main drivers of the widening wealth gap over the past decade, according to the report.
These increases generally flowed to elderly homeowners, the analysis reveals – exacerbating the generational financial disparity.
Intergenerational Economic Gaps
The average wealth gap between individuals aged 30-34 and people aged 60-64 grew by more than 100% in inflation-adjusted terms, from 135 thousand pounds in 2006-08, to 310 thousand pounds.
Regional Disparities
There were also stark area-based disparities, with the average level of net worth in 2020-22 amounting to 290 thousand pounds in south-east England, where housing costs have typically increased quickly, as opposed to £110,000 in the north-east.
Pandemic Period Impact
Throughout the COVID period, when countless laborers were covered under the taxpayer-backed furlough scheme, and health crisis restrictions curtailed consumption options, the data shows countless homes were able to save, increasing their wealth.
More affluent homes fared much better, however. "The average household in the lowest-income quintile saw their cash reserves increase by just £80 during the COVID years (across the pandemic timeframe), approximately equivalent to the pre-crisis period. In contrast, the typical family in the highest income quintile saw their cash reserves increase by £4,200," the study reveals.
