Per new study, the median worker in the UK would need half a century of earnings to reach the net worth of the richest 10% in the country.
Expanding Wealth Gap Across Decades
The analysis examined financial assets information covering the 2020-22 timeframe and determined that in the pre-financial crisis era, it would have needed nearly four decades of average worker salary to join the top 10th of the financial hierarchy.
An economic expert associated with the report commented: "Financial divides in Britain are currently so significant that a regular employee setting aside their entire income throughout their career would still not be able to attain the highest level of the financial hierarchy."
Measuring the Wealth Divide
The study revealed that the disparity between the net worth of the average person and a person belonging to the richest segment was £1m in the pre-crisis period, but had expanded to £1.3 million in inflation-adjusted terms by recent times.
The economist added: "These differences are especially alarming as economic movement in Britain is restricted – people that start life well-off tend to continue being rich, and conversely applies."
Relative Wealth Inequality
Even with the wealth gap growing in specific figures, the percentage of overall assets in the UK possessed by the richest households – termed "comparative financial divide" – has been "mostly consistent since the 1980s," according to the research.
During this period, complete net worth in the UK increased dramatically from thrice the gross domestic product, to approximately 7.5x.
Contributors of Financial Divide
Termed "unearned" increases, through rising house prices and adjustments to superannuation evaluations, were the key contributors of the expanding economic divide since 2010, according to the report.
These appreciations tended to accrue to elderly homeowners, the analysis reveals – intensifying the generational financial disparity.
Intergenerational Wealth Disparities
The typical financial disparity between thirty-somethings and those in their early 60s increased over twofold in real terms, from 135 thousand pounds in 2006-08, to £310,000.
Regional Variations
There were also stark geographic differences, with the average level of wealth in the pandemic period standing at £290,000 in the SE of England, where property prices have generally grown substantially, versus £110,000 in the north-east.
Health Crisis Years Impact
Throughout the COVID period, when numerous employees were protected by the government-supported job retention program, and health crisis restrictions curtailed consumption options, the data shows countless homes were in a position to set aside money, enhancing their financial standing.
Wealthier families performed significantly better, though. "The average household in the bottom income bracket saw their available funds rise by merely £80 over the pandemic period (across the pandemic timeframe), broadly the same as the two years pre-pandemic. On the other hand, the median home in the top income bracket saw their liquid savings rise by £4,200," the study reveals.
