Based on fresh research, the median worker in the UK would have to work over five decades of salary to attain the financial standing of the most affluent 10% nationwide.
Widening Wealth Gap Over Time
The study reviewed financial assets statistics from the recent health crisis years and discovered that during 2006-08, it would have required 38 years of typical employment income to enter the wealthiest decile of the wealth distribution.
An economic expert involved with the report commented: "Economic disparities in Britain are now so large that a regular employee accumulating their complete salary across their entire working life would continue to be incapable to reach the top of the economic scale."
Measuring the Wealth Divide
The research found that the difference between the assets of the typical individual and a person belonging to the top 10% was £1m in 2006-08, but had expanded to £1.3m in real terms by the pandemic years.
The analyst further stated: "These disparities are especially alarming as economic movement in Britain is low – people that start life affluent tend to continue being rich, and conversely applies."
Comparative Financial Divide
Although the wealth gap widening in actual numbers, the percentage of total wealth in the UK possessed by the richest households – called "comparative financial divide" – has been "broadly stable since the 1980s era," as stated in the research.
Over this timeframe, total wealth in the UK rose substantially from three times the gross domestic product, to approximately 7.5x.
Factors of Economic Disparity
So-called "passive" appreciation, via rising house prices and changes in retirement fund assessments, were the key contributors of the expanding economic divide over the past decade, per the study.
These gains typically went to elderly homeowners, the analysis reveals – worsening the intergenerational wealth divide.
Age-Based Wealth Disparities
The median economic difference between individuals aged 30-34 and those in their early 60s more than doubled in actual value, from 135 thousand pounds in pre-financial crisis, to 310 thousand pounds.
Geographic Disparities
Additionally, there were stark geographic differences, with the median value of assets in the pandemic period reaching £290k in the SE of England, where property prices have typically increased quickly, as opposed to £110,000 in the north-east.
Pandemic Period Effects
Amid the health crisis, when millions of workers were supported by the public-funded employment protection, and pandemic lockdowns reduced expenditure possibilities, the statistics indicate numerous families were capable of accumulating, increasing their wealth.
Higher-income households fared much better, though. "The median home in the poorest fifth saw their available funds increase by just £80 over the pandemic period (across the pandemic timeframe), approximately equivalent to the 24 months before COVID. In contrast, the average household in the wealthiest fifth saw their liquid savings rise by £4,200," the analysis concludes.
