Based on new analysis, the typical employee in the UK would have to work 52 years' worth of salary to attain the wealth level of the most affluent 10% nationwide.
Growing Economic Disparity Across Decades
The analysis examined net worth statistics from the recent health crisis years and determined that during the pre-financial crisis era, it would have needed nearly four decades of median full-time earnings to join the top 10th of the financial hierarchy.
A senior economist part of the report commented: "Wealth gaps in Britain are currently so significant that a average worker saving all their earnings throughout their career would continue to be incapable to attain the highest level of the wealth ladder."
Quantifying the Wealth Divide
The research found that the difference between the net worth of the median citizen and a person belonging to the top 10% was £1m in the pre-crisis period, but had increased to £1.3 million in real terms by recent times.
The economist continued: "These gaps are especially alarming as financial progression in Britain is restricted – people that start life affluent tend to remain affluent, and the opposite holds true."
Comparative Financial Divide
Although the financial disparity expanding in specific figures, the share of overall assets in the UK held by the most affluent homes – called "comparative financial divide" – has been "mostly consistent since the eighties," according to the research.
Over this timeframe, overall assets in the UK rose substantially from triple the yearly economic output, to nearly seven and a half times.
Drivers of Wealth Inequality
Termed "passive" increases, via increasing property values and changes in retirement fund assessments, were the key contributors of the growing financial disparity from 2010 onward, according to the analysis.
These appreciations typically went to older, property-owning households, the research shows – intensifying the intergenerational wealth divide.
Generational Wealth Disparities
The typical financial disparity between people in their early 30s and those in their early 60s increased over twofold in inflation-adjusted terms, from £135k in the mid-2000s, to £310k.
Regional Variations
Additionally, there were pronounced regional variations, with the average level of net worth in recent years reaching £290k in the SE of England, where property prices have tended to rise rapidly, versus £110k in the north-east.
Health Crisis Years Effects
Throughout the COVID period, when numerous employees were covered under the government-supported job retention program, and pandemic lockdowns limited opportunities for spending, the information reveals many households were able to save, increasing their wealth.
More affluent homes fared much better, though. "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. On the other hand, the typical family in the wealthiest fifth saw their liquid savings increase by £4,200," the analysis concludes.
