Per new analysis, the median employee in the UK would have to work half a century of income to reach the net worth of the most affluent 10% in the country.
Widening Financial Divide Across Decades
This research reviewed net worth data covering the Covid pandemic period and determined that back in the mid-2000s, it would have taken nearly four decades of average worker salary to enter the wealthiest decile of the economic ladder.
A research lead involved with the study observed: "Financial divides in Britain are now so large that a average worker setting aside their entire income throughout their career would still not be able to attain the highest level of the financial hierarchy."
Quantifying the Wealth Divide
The analysis revealed that the disparity between the wealth of the typical individual and an individual in the top 10% was one million pounds in the pre-crisis period, but had increased to 1.3 million pounds in actual value by recent times.
The analyst continued: "These disparities are especially alarming as wealth mobility in Britain is restricted – people that start life affluent tend to remain affluent, and conversely applies."
Comparative Financial Divide
Despite the economic divide growing in absolute terms, the portion of total wealth in the UK held by the wealthiest families – known as "comparative financial divide" – has been "mostly consistent since the eighties," according to the analysis.
During this period, total wealth in the UK increased dramatically from thrice the yearly economic output, to almost 7.5 times.
Contributors of Financial Divide
Termed "unearned" increases, by means of increasing property values and variations in retirement fund assessments, were the primary factors of the growing financial disparity from 2010 onward, per the study.
These increases tended to accrue to older, property-owning households, the research shows – intensifying the age-based economic gap.
Generational Economic Gaps
The median economic difference between individuals aged 30-34 and people aged 60-64 increased over twofold in inflation-adjusted terms, from 135 thousand pounds in the mid-2000s, to £310k.
Area-Based Differences
Furthermore, the study revealed pronounced regional variations, with the average level of assets in recent years amounting to £290k in the SE of England, where housing costs have generally grown substantially, as opposed to £110,000 in the north-east.
Pandemic Period Consequences
Amid the health crisis, when countless laborers were supported by the government-supported job retention program, and pandemic lockdowns limited opportunities for spending, the data shows numerous families were capable of accumulating, increasing their wealth.
Higher-income households performed significantly better, however. "The typical family in the poorest fifth saw their liquid savings rise by merely £80 throughout the health crisis (2019-20 to 2021-22), roughly identical to the 24 months before COVID. In contrast, the median home in the highest income quintile saw their liquid savings rise by £4,200," the analysis concludes.
