Based on new analysis, the average earner in the UK would have to work 52 years' worth of salary to attain the financial standing of the richest 10% of the population.
Growing Financial Divide Through the Years
The study reviewed financial assets statistics covering the 2020-22 timeframe and determined that back in 2006-08, it would have required 38 years of median full-time earnings to join the richest segment of the financial hierarchy.
A research lead involved with the report observed: "Financial divides in Britain are currently so significant that a regular employee setting aside their entire income across their entire working life would remain unable to reach the top of the wealth ladder."
Measuring the Economic Gap
The study found that the disparity between the assets of the average person and a person belonging to the richest segment was one million pounds in 2006-08, but had expanded to 1.3 million pounds in actual value by the pandemic years.
The analyst added: "These differences are especially alarming as economic movement in Britain is restricted – those who commence life well-off tend to remain affluent, and vice versa."
Proportional Economic Disparity
Despite the economic divide widening in absolute terms, the portion of complete net worth in the UK held by the most affluent homes – known as "relative wealth inequality" – has been "largely unchanged since the 1980s," as stated in the analysis.
Over this timeframe, total wealth in the UK rose substantially from three times the gross domestic product, to almost 7.5 times.
Drivers of Financial Divide
Termed "automatic" increases, through rising house prices and changes in superannuation evaluations, were the primary factors of the widening wealth gap from 2010 onward, as stated in the analysis.
These appreciations generally flowed to senior citizens with real estate, the analysis reveals – exacerbating the age-based economic gap.
Intergenerational Economic Gaps
The typical financial disparity between individuals aged 30-34 and people aged 60-64 grew by more than 100% in inflation-adjusted terms, from £135k in pre-financial crisis, to 310 thousand pounds.
Regional Disparities
There were also stark area-based disparities, with the typical amount of wealth in 2020-22 standing at £290,000 in south-east England, where housing costs have generally grown substantially, versus 110 thousand pounds in the north-east.
Pandemic Period Impact
Amid the health crisis, when numerous employees were protected by the public-funded employment protection, and pandemic lockdowns curtailed consumption options, the statistics indicate many households were in a position to set aside money, enhancing their financial standing.
Wealthier families achieved superior outcomes, though. "The typical family in the lowest-income quintile saw their available funds increase by just £80 during the COVID years (across the pandemic timeframe), broadly the same as the two years pre-pandemic. On the other hand, the typical family in the highest income quintile saw their liquid savings rise by £4,200," the study reveals.
