According to new study, the typical worker in the UK would have to work over five decades of salary to attain the wealth level of the most affluent 10% nationwide.
Widening Financial Divide Across Decades
The analysis analyzed financial assets statistics covering the recent health crisis years and found that during 2006-08, it would have needed 38 years of average worker salary to enter the top 10th of the economic ladder.
A senior economist involved with the report stated: "Financial divides in Britain are currently so significant that a typical full-time employee accumulating their complete salary across their entire working life would continue to be incapable to attain the highest level of the wealth ladder."
Assessing the Economic Gap
The research revealed that the difference between the assets of the median citizen and an individual in the top 10% was £1 million in the mid-2000s, but had increased to £1.3m in real terms by the pandemic years.
The analyst further stated: "These gaps are doubly concerning as wealth mobility in Britain is restricted – those who commence life well-off tend to stay wealthy, and the opposite holds true."
Relative Wealth Inequality
Even with the financial disparity growing in actual numbers, the percentage of overall assets in the UK held by the wealthiest families – termed "relative wealth inequality" – has been "broadly stable since the eighties," according to the research.
During this period, complete net worth in the UK increased dramatically from triple the gross domestic product, to almost 7.5 times.
Factors of Wealth Inequality
Termed "unearned" gains, via rising house prices and changes in superannuation evaluations, were the key contributors of the expanding economic divide from 2010 onward, as stated in the report.
These increases typically went to older, property-owning households, the research shows – intensifying the age-based economic gap.
Age-Based Wealth Disparities
The typical financial disparity between people in their early 30s and sixty-somethings increased over twofold in actual value, from £135,000 in 2006-08, to £310k.
Geographic Disparities
There were also pronounced geographic differences, with the typical amount of wealth in 2020-22 standing at 290 thousand pounds in the SE of England, where housing costs have generally grown substantially, compared with £110,000 in the NE of England.
Health Crisis Years Consequences
Amid the health crisis, when numerous employees were protected by the taxpayer-backed furlough scheme, and pandemic lockdowns reduced expenditure possibilities, the statistics indicate countless homes were able to save, increasing their wealth.
Higher-income households performed significantly better, however. "The average household in the bottom income bracket saw their liquid savings increase by just £80 during the COVID years (across the pandemic timeframe), broadly the same as the two years pre-pandemic. Conversely, the median home in the highest income quintile saw their available funds rise by £4,200," the analysis concludes.
