Based on new analysis, the typical earner in the UK would need 52 years' worth of salary to achieve the net worth of the most affluent 10% of the population.
Growing Wealth Gap Over Time
This research reviewed net worth data from the 2020-22 timeframe and determined that back in the pre-financial crisis era, it would have needed 38 years' worth of median full-time earnings to reach the top 10th of the wealth distribution.
A research lead involved with the study commented: "Economic disparities in Britain are now so large that a average worker setting aside their entire income throughout their career would still not be able to reach the top of the financial hierarchy."
Quantifying the Financial Disparity
The analysis found that the gap between the net worth of the typical individual and an individual in the richest segment was one million pounds in 2006-08, but had widened to £1.3 million in real terms by the pandemic years.
The researcher further stated: "These differences are particularly worrying as wealth mobility in Britain is low – those who commence life affluent tend to continue being rich, and vice versa."
Proportional Economic Disparity
Although the economic divide expanding in specific figures, the percentage of overall assets in the UK held by the wealthiest families – termed "proportional economic disparity" – has been "largely unchanged since the eighties," as stated in the analysis.
During this period, overall assets in the UK surged from thrice the gross domestic product, to nearly seven and a half times.
Factors of Wealth Inequality
Termed "unearned" gains, via growing real estate costs and adjustments to superannuation evaluations, were the main drivers of the growing financial disparity over the past decade, as stated in the study.
These increases tended to accrue to older, property-owning households, the research shows – exacerbating the generational financial disparity.
Age-Based Wealth Disparities
The median economic difference between individuals aged 30-34 and those in their early 60s more than doubled in real terms, from 135 thousand pounds in pre-financial crisis, to £310k.
Regional Differences
Furthermore, the study revealed stark regional variations, with the typical amount of assets in 2020-22 amounting to 290 thousand pounds in south-east England, where housing costs have generally grown substantially, as opposed to £110,000 in the north-east.
COVID Era Consequences
Amid the health crisis, when numerous employees were covered under the public-funded employment protection, and health crisis restrictions limited opportunities for spending, the information reveals many households were in a position to set aside money, enhancing their financial standing.
More affluent homes performed significantly better, however. "The median home in the poorest fifth saw their cash reserves rise by merely £80 over the pandemic period (from 2019 to 2022), roughly identical to the two years pre-pandemic. On the other hand, the typical family in the top income bracket saw their available funds rise by £4,200," the report finds.
