Per recent research, the median earner in the UK would require 52 years' worth of income to reach the financial standing of the richest 10% in the country.
Widening Wealth Gap Over Time
The study reviewed financial assets data including the 2020-22 timeframe and found that back in the pre-financial crisis era, it would have needed nearly four decades of average worker salary to enter the top 10th of the economic ladder.
An economic expert associated with the report stated: "Financial divides in Britain are now so large that a regular employee saving all their earnings during their working years would remain unable to reach the top of the financial hierarchy."
Measuring the Financial Disparity
The study revealed that the difference between the net worth of the median citizen and a person belonging to the top 10% was £1 million in the mid-2000s, but had increased to 1.3 million pounds in real terms by 2020-22.
The researcher added: "These disparities are doubly concerning as wealth mobility in Britain is limited – those who commence life well-off tend to continue being rich, and the opposite holds true."
Relative Wealth Inequality
Although the economic divide widening in actual numbers, the portion of complete net worth in the UK held by the richest households – called "proportional economic disparity" – has been "broadly stable since the 1980s era," according to the analysis.
Throughout these years, overall assets in the UK rose substantially from triple the annual GDP, to almost 7.5 times.
Factors of Economic Disparity
Referred to as "unearned" gains, by means of increasing property values and changes in retirement fund assessments, were the main drivers of the growing financial disparity since 2010, per the report.
These appreciations typically went to older, property-owning households, the study demonstrates – worsening the age-based economic gap.
Generational Economic Gaps
The typical financial disparity between individuals aged 30-34 and those in their early 60s more than doubled in real terms, from £135k in 2006-08, to £310,000.
Area-Based Variations
Furthermore, the study revealed significant regional variations, with the average level of assets in recent years reaching £290,000 in south-east England, where housing costs have tended to rise rapidly, as opposed to £110k in the NE of England.
Pandemic Period Consequences
Amid the health crisis, when numerous employees were covered under the government-supported job retention program, and pandemic lockdowns curtailed consumption options, the data shows many households were in a position to set aside money, growing their net worth.
Wealthier families fared much better, though. "The average household in the lowest-income quintile saw their liquid savings increase by just £80 during the COVID years (2019-20 to 2021-22), approximately equivalent to the 24 months before COVID. Conversely, the average household in the wealthiest fifth saw their liquid savings increase by £4,200," the study reveals.
