Based on new analysis, the average earner in the UK would require 52 years' worth of salary to reach the wealth level of the wealthiest 10% in the country.
Expanding Economic Disparity Over Time
The analysis analyzed wealth distribution information covering the Covid pandemic period and found that back in the pre-financial crisis era, it would have required 38 years of median full-time earnings to join the richest segment of the economic ladder.
A research lead involved with the analysis commented: "Financial divides in Britain are presently so substantial that a regular employee accumulating their complete salary during their working years would still not be able to attain the highest level of the economic scale."
Measuring the Wealth Divide
The analysis found that the difference between the wealth of the median citizen and someone in the wealthiest decile was one million pounds in the mid-2000s, but had widened to £1.3m in actual value by the pandemic years.
The analyst added: "These gaps are particularly worrying as economic movement in Britain is limited – individuals who begin life affluent tend to remain affluent, and vice versa."
Relative Wealth Inequality
Even with the economic divide widening in absolute terms, the portion of total wealth in the UK held by the wealthiest families – called "proportional economic disparity" – has been "broadly stable since the eighties," per the study.
Over this timeframe, total wealth in the UK rose substantially from thrice the annual GDP, to nearly seven and a half times.
Factors of Wealth Inequality
Termed "unearned" gains, through rising house prices and variations in retirement fund assessments, were the primary factors of the expanding economic divide over the past decade, according to the analysis.
These gains typically went to senior citizens with real estate, the research shows – intensifying the intergenerational wealth divide.
Age-Based Wealth Disparities
The median economic difference between thirty-somethings and those in their early 60s grew by more than 100% in real terms, from 135 thousand pounds in 2006-08, to £310k.
Geographic Disparities
There were also significant geographic differences, with the typical amount of assets in recent years standing at 290 thousand pounds in south-east England, where property prices have generally grown substantially, compared with £110k in the NE of England.
Pandemic Period Effects
Amid the health crisis, when millions of workers were covered under the public-funded employment protection, and pandemic lockdowns curtailed consumption options, the information reveals many households were able to save, enhancing their financial standing.
Higher-income households fared much better, nevertheless. "The median home in the lowest-income quintile saw their available funds increase by just £80 during the COVID years (2019-20 to 2021-22), broadly the same as the 24 months before COVID. Conversely, the median home in the top income bracket saw their cash reserves grow by 4,200 pounds," the analysis concludes.
