According to recent study, the typical employee in the UK would have to work half a century of salary to reach the net worth of the most affluent 10% in the country.
Growing Economic Disparity Over Time
The study examined financial assets information covering the recent health crisis years and discovered that back in 2006-08, it would have taken nearly four decades of average worker salary to join the richest segment of the economic ladder.
A senior economist part of the report commented: "Economic disparities in Britain are currently so significant that a typical full-time employee accumulating their complete salary during their working years would continue to be incapable to attain the highest level of the financial hierarchy."
Measuring the Wealth Divide
The study discovered that the difference between the wealth of the average person and a person belonging to the top 10% was one million pounds in 2006-08, but had expanded to £1.3 million in real terms by the pandemic years.
The analyst added: "These disparities are particularly worrying as wealth mobility in Britain is low – individuals who begin life affluent tend to remain affluent, and conversely applies."
Relative Wealth Inequality
Although the economic divide widening in specific figures, the share of complete net worth in the UK owned by the wealthiest families – termed "proportional economic disparity" – has been "broadly stable since the eighties," as stated in the study.
Over this timeframe, overall assets in the UK rose substantially from triple the gross domestic product, to nearly seven and a half times.
Factors of Financial Divide
Referred to as "automatic" increases, through rising house prices and adjustments to pension valuations, were the main drivers of the growing financial disparity since 2010, according to the report.
These increases generally flowed to elderly homeowners, the analysis reveals – worsening the age-based economic gap.
Age-Based Economic Gaps
The average wealth gap between thirty-somethings and people aged 60-64 increased over twofold in inflation-adjusted terms, from 135 thousand pounds in pre-financial crisis, to 310 thousand pounds.
Area-Based Disparities
Furthermore, the study revealed stark area-based disparities, with the average level of net worth in 2020-22 standing at £290,000 in south-east England, where real estate values have tended to rise rapidly, compared with 110 thousand pounds in the northeastern region.
COVID Era Impact
Amid the health crisis, when millions of workers were supported by the public-funded employment protection, and Covid shutdowns reduced expenditure possibilities, the statistics indicate countless homes were capable of accumulating, growing their net worth.
More affluent homes achieved superior outcomes, however. "The average household in the lowest-income quintile saw their available funds grow by only eighty pounds throughout the health crisis (from 2019 to 2022), broadly the same as the two years pre-pandemic. In contrast, the median home in the top income bracket saw their cash reserves increase by £4,200," the study reveals.
