Per new study, the average earner in the UK would require half a century of earnings to attain the financial standing of the most affluent 10% of the population.
Expanding Wealth Gap Over Time
The study analyzed financial assets data covering the 2020-22 timeframe and found that during 2006-08, it would have required 38 years of median full-time earnings to reach the richest segment of the economic ladder.
A research lead associated with the study 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 attain the highest level of the financial hierarchy."
Assessing the Economic Gap
The analysis revealed that the difference between the net worth of the average person and someone in the top 10% was £1 million in 2006-08, but had increased to £1.3 million in real terms by recent times.
The researcher continued: "These disparities are doubly concerning as economic movement in Britain is restricted – individuals who begin life affluent tend to remain affluent, and vice versa."
Proportional Economic Disparity
Even with the wealth gap expanding in absolute terms, the percentage of overall assets in the UK owned by the most affluent homes – known as "relative wealth inequality" – has been "mostly consistent since the 1980s era," per the analysis.
Over this timeframe, overall assets in the UK increased dramatically from triple the annual GDP, to almost 7.5 times.
Contributors of Economic Disparity
Referred to as "passive" increases, through rising house prices and variations in retirement fund assessments, were the main drivers of the growing financial disparity from 2010 onward, as stated in the analysis.
These appreciations tended to accrue to senior citizens with real estate, the analysis reveals – exacerbating the generational financial disparity.
Generational Wealth Disparities
The median economic difference between people in their early 30s and those in their early 60s grew by more than 100% in actual value, from £135,000 in pre-financial crisis, to £310k.
Geographic Disparities
Additionally, there were pronounced area-based disparities, with the typical amount of assets in recent years reaching 290 thousand pounds in south-east England, where real estate values have tended to rise rapidly, compared with £110,000 in the NE of England.
COVID Era Impact
During the pandemic, when millions of workers were covered under the public-funded employment protection, and pandemic lockdowns limited opportunities for spending, the statistics indicate many households were in a position to set aside money, growing their net worth.
Higher-income households performed significantly better, however. "The average household in the lowest-income quintile saw their liquid savings grow by only eighty pounds during the COVID years (across the pandemic timeframe), approximately equivalent to the two years pre-pandemic. Conversely, the typical family in the top income bracket saw their liquid savings grow by 4,200 pounds," the study reveals.
