Per new study, the typical earner in the UK would require 52 years' worth of earnings to attain the financial standing of the most affluent 10% in the country.
Expanding Economic Disparity Over Time
The study reviewed financial assets data from the Covid pandemic period and determined that during the pre-financial crisis era, it would have needed 38 years' worth of typical employment income to enter the wealthiest decile of the financial hierarchy.
A senior economist associated with the analysis commented: "Wealth gaps in Britain are now so large that a regular employee setting aside their entire income across their entire working life would remain unable to attain the highest level of the financial hierarchy."
Assessing the Wealth Divide
The research found that the disparity between the wealth of the average person and a person belonging to the wealthiest decile was £1 million in the mid-2000s, but had increased to 1.3 million pounds in inflation-adjusted terms by the pandemic years.
The economist continued: "These gaps are particularly worrying as economic movement in Britain is restricted – individuals who begin life affluent tend to continue being rich, and vice versa."
Comparative Financial Divide
Despite the financial disparity growing in absolute terms, the share of complete net worth in the UK owned by the richest households – known as "relative wealth inequality" – has been "mostly consistent since the 1980s era," per the analysis.
During this period, overall assets in the UK surged from triple the yearly economic output, to almost 7.5 times.
Contributors of Economic Disparity
So-called "automatic" gains, via rising house prices and variations in pension valuations, were the key contributors of the growing financial disparity over the past decade, according to the report.
These increases tended to accrue to senior citizens with real estate, the study demonstrates – worsening the intergenerational wealth divide.
Generational Wealth Disparities
The median economic difference between individuals aged 30-34 and people aged 60-64 grew by more than 100% in inflation-adjusted terms, from £135k in pre-financial crisis, to £310,000.
Regional Disparities
There were also stark regional variations, with the typical amount of wealth in 2020-22 amounting to £290k in the SE of England, where real estate values have tended to rise rapidly, compared with £110,000 in the northeastern region.
Pandemic Period Effects
Throughout the COVID period, when numerous employees were supported by the public-funded employment protection, and health crisis restrictions curtailed consumption options, the data shows numerous families were in a position to set aside money, increasing their wealth.
Wealthier families performed significantly better, however. "The average household in the lowest-income quintile saw their available funds increase by just £80 throughout the health crisis (2019-20 to 2021-22), broadly the same as the two years pre-pandemic. Conversely, the typical family in the top income bracket saw their available funds grow by 4,200 pounds," the analysis concludes.
