Based on fresh study, the median earner in the UK would have to work over five decades of earnings to reach the net worth of the richest 10% nationwide.
Growing Wealth Gap Over Time
The study analyzed wealth distribution statistics from the recent health crisis years and found that back in the mid-2000s, it would have needed 38 years' worth of typical employment income to enter the top 10th of the wealth distribution.
An economic expert associated with the study commented: "Wealth gaps in Britain are now so large that a typical full-time employee saving all their earnings throughout their career would still not be able to achieve the peak of the economic scale."
Assessing the Financial Disparity
The study revealed that the difference between the net worth of the average person and an individual in the top 10% was one million pounds in the pre-crisis period, but had widened to £1.3 million in inflation-adjusted terms by the pandemic years.
The economist further stated: "These differences are particularly worrying as economic movement in Britain is limited – people that start life well-off tend to continue being rich, and conversely applies."
Comparative Financial Divide
Despite the wealth gap widening in actual numbers, the portion of overall assets in the UK owned by the wealthiest families – known as "comparative financial divide" – has been "largely unchanged since the eighties," per the research.
Throughout these years, total wealth in the UK surged from three times the annual GDP, to approximately 7.5x.
Contributors of Financial Divide
Termed "unearned" gains, through increasing property values and adjustments to pension valuations, were the primary factors of the growing financial disparity since 2010, as stated in the report.
These increases tended to accrue to elderly homeowners, the study demonstrates – worsening the generational financial disparity.
Age-Based Wealth Disparities
The median economic difference between people in their early 30s and those in their early 60s more than doubled in actual value, from 135 thousand pounds in the mid-2000s, to £310k.
Area-Based Disparities
Furthermore, the study revealed significant area-based disparities, with the average level of assets in 2020-22 amounting to £290,000 in south-east England, where real estate values have tended to rise rapidly, as opposed to £110k in the northeastern region.
Health Crisis Years Consequences
Throughout the COVID period, when millions of workers were supported by the public-funded employment protection, and Covid shutdowns curtailed consumption options, the information reveals countless homes were capable of accumulating, growing their net worth.
Wealthier families 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 pre-crisis period. On the other hand, the median home in the top income bracket saw their available funds increase by £4,200," the analysis concludes.
