Per fresh research, the average worker in the UK would have to work over five decades of income to achieve the wealth level of the richest 10% nationwide.
Growing Financial Divide Through the Years
This research analyzed wealth distribution information including the 2020-22 timeframe and found that back in the pre-financial crisis era, it would have required nearly four decades of average worker salary to enter the top 10th of the wealth distribution.
A senior economist part of the analysis stated: "Financial divides in Britain are currently so significant that a typical full-time employee setting aside their entire income across their entire working life would still not be able to attain the highest level of the financial hierarchy."
Measuring the Economic Gap
The analysis found that the gap between the assets of the typical individual and a person belonging to the wealthiest decile was £1 million in the mid-2000s, but had widened to 1.3 million pounds in inflation-adjusted terms by the pandemic years.
The researcher further stated: "These differences are particularly worrying as economic movement in Britain is limited – individuals who begin life well-off tend to remain affluent, and conversely applies."
Comparative Financial Divide
Even with the wealth gap expanding in specific figures, the share of overall assets in the UK held by the wealthiest families – called "proportional economic disparity" – has been "broadly stable since the 1980s era," per the analysis.
Over this timeframe, complete net worth in the UK rose substantially from triple the gross domestic product, to approximately 7.5x.
Drivers of Economic Disparity
Termed "automatic" gains, through growing real estate costs and changes in pension valuations, were the main drivers of the expanding economic divide over the past decade, as stated in the analysis.
These appreciations tended to accrue to senior citizens with real estate, the study demonstrates – worsening the generational financial disparity.
Generational Economic Gaps
The median economic difference between thirty-somethings and those in their early 60s more than doubled in inflation-adjusted terms, from 135 thousand pounds in 2006-08, to £310,000.
Regional Differences
There were also significant regional variations, with the average level of assets in the pandemic period amounting to 290 thousand pounds in south-east England, where property prices have typically increased quickly, as opposed to £110k in the northeastern region.
Health Crisis Years Consequences
Amid the health crisis, when millions of workers were protected by the government-supported job retention program, and pandemic lockdowns limited opportunities for spending, the data shows countless homes were capable of accumulating, enhancing their financial standing.
Higher-income households achieved superior outcomes, though. "The typical family in the bottom income bracket saw their cash reserves increase by just £80 over the pandemic period (from 2019 to 2022), broadly the same as the 24 months before COVID. In contrast, the typical family in the wealthiest fifth saw their liquid savings rise by £4,200," the analysis concludes.
