Based on fresh analysis, the median earner in the UK would have to work 52 years' worth of income to achieve the wealth level of the wealthiest 10% nationwide.
Expanding Economic Disparity Through the Years
The study reviewed wealth distribution data from the 2020-22 timeframe and determined that during the pre-financial crisis era, it would have required 38 years' worth of average worker salary to enter the top 10th of the wealth distribution.
A senior economist involved with the report commented: "Economic disparities in Britain are currently so significant that a typical full-time employee setting aside their entire income during their working years would continue to be incapable to reach the top of the wealth ladder."
Quantifying the Financial Disparity
The study revealed that the difference between the wealth of the average person and someone in the richest segment was £1 million in 2006-08, but had increased to £1.3m in real terms by recent times.
The researcher added: "These disparities are doubly concerning as wealth mobility in Britain is limited – people that start life wealthy tend to remain affluent, and the opposite holds true."
Relative Wealth Inequality
Despite the economic divide growing in absolute terms, the portion of total wealth in the UK possessed by the richest households – termed "comparative financial divide" – has been "broadly stable since the 1980s," according to the study.
During this period, overall assets in the UK surged from three times the annual GDP, to nearly seven and a half times.
Factors of Financial Divide
Termed "automatic" increases, by means of increasing property values and adjustments to retirement fund assessments, were the key contributors of the growing financial disparity from 2010 onward, as stated in the study.
These appreciations typically went to older, property-owning households, the study demonstrates – worsening the generational financial disparity.
Age-Based Wealth Disparities
The typical financial disparity between thirty-somethings and people aged 60-64 increased over twofold in inflation-adjusted terms, from £135k in pre-financial crisis, to 310 thousand pounds.
Regional Differences
Furthermore, the study revealed pronounced geographic differences, with the average level of net worth in recent years standing at £290,000 in south-east England, where property prices have tended to rise rapidly, versus £110k in the NE of England.
Pandemic Period Consequences
Amid the health crisis, when countless laborers were supported by the taxpayer-backed furlough scheme, and pandemic lockdowns reduced expenditure possibilities, the information reveals many households were capable of accumulating, enhancing their financial standing.
Higher-income households achieved superior outcomes, however. "The typical family 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 two years pre-pandemic. In contrast, the average household in the top income bracket saw their available funds rise by £4,200," the study reveals.
