Per recent study, the typical earner in the UK would require over five decades of salary to attain the wealth level of the wealthiest 10% in the country.
Growing Wealth Gap Over Time
The analysis examined wealth distribution statistics from the recent health crisis years and found that during 2006-08, it would have taken 38 years' worth of typical employment income to enter the wealthiest decile of the financial hierarchy.
A research lead part of the study observed: "Economic disparities in Britain are currently so significant that a average worker saving all their earnings throughout their career would still not be able to reach the top of the financial hierarchy."
Assessing the Economic Gap
The analysis found that the difference between the assets of the average person and a person belonging to the richest segment was £1m in the pre-crisis period, but had widened to £1.3 million in inflation-adjusted terms by the pandemic years.
The economist continued: "These gaps are particularly worrying as economic movement in Britain is restricted – people that start life well-off tend to stay wealthy, and the opposite holds true."
Relative Wealth Inequality
Despite the economic divide expanding in absolute terms, the portion of total wealth in the UK owned by the most affluent homes – known as "relative wealth inequality" – has been "broadly stable since the 1980s," according to the research.
During this period, total wealth in the UK rose substantially from thrice the annual GDP, to almost 7.5 times.
Factors of Financial Divide
Termed "automatic" gains, via increasing property values and changes in pension valuations, were the key contributors of the expanding economic divide over the past decade, per the analysis.
These gains typically went to elderly homeowners, the study demonstrates – worsening the age-based economic gap.
Generational Financial Divides
The typical financial disparity between individuals aged 30-34 and people aged 60-64 grew by more than 100% in real terms, from 135 thousand pounds in the mid-2000s, to £310,000.
Geographic Variations
There were also significant geographic differences, with the median value of wealth in recent years amounting to £290,000 in the SE of England, where housing costs have tended to rise rapidly, as opposed to £110k in the NE of England.
Pandemic Period Consequences
During the pandemic, when numerous employees were protected by the taxpayer-backed furlough scheme, and pandemic lockdowns curtailed consumption options, the information reveals numerous families were able to save, increasing their wealth.
Higher-income households fared much better, nevertheless. "The median home in the poorest fifth saw their liquid savings grow by only eighty pounds during the COVID years (2019-20 to 2021-22), roughly identical to the 24 months before COVID. In contrast, the median home in the top income bracket saw their available funds rise by £4,200," the report finds.
