According to new research, the median worker in the UK would require 52 years' worth of salary to attain the financial standing of the most affluent 10% in the country.
Widening Wealth Gap Through the Years
This research analyzed wealth distribution information including the recent health crisis years and discovered that in 2006-08, it would have required nearly four decades of average worker salary to reach the top 10th of the wealth distribution.
An economic expert part of the study observed: "Financial divides in Britain are currently so significant that a typical full-time employee saving all their earnings throughout their career would still not be able to reach the top of the wealth ladder."
Measuring the Economic Gap
The analysis revealed that the difference between the net worth of the median citizen and an individual in the richest segment was £1 million in the pre-crisis period, but had widened to £1.3 million in inflation-adjusted terms by 2020-22.
The analyst added: "These gaps are doubly concerning as economic movement in Britain is limited – people that start life well-off tend to stay wealthy, and vice versa."
Relative Wealth Inequality
Even with the financial disparity growing in actual numbers, the percentage of total wealth in the UK possessed by the richest households – known as "comparative financial divide" – has been "mostly consistent since the eighties," according to the research.
Throughout these years, total wealth in the UK rose substantially from triple the yearly economic output, to nearly seven and a half times.
Contributors of Financial Divide
Termed "automatic" gains, through increasing property values and adjustments to pension valuations, were the primary factors of the growing financial disparity over the past decade, per the report.
These appreciations tended to accrue to elderly homeowners, the research shows – intensifying the intergenerational wealth divide.
Age-Based Financial Divides
The average wealth gap between individuals aged 30-34 and sixty-somethings grew by more than 100% in actual value, from 135 thousand pounds in pre-financial crisis, to £310k.
Area-Based Variations
Additionally, there were significant geographic differences, with the average level of net worth in the pandemic period amounting to £290,000 in the SE of England, where housing costs have tended to rise rapidly, versus £110,000 in the NE of England.
Health Crisis Years Consequences
Amid the health crisis, when millions of workers were covered under the government-supported job retention program, and health crisis restrictions limited opportunities for spending, the data shows many households were able to save, growing their net worth.
Wealthier families fared much better, nevertheless. "The average household in the bottom income bracket saw their cash reserves grow by only eighty pounds throughout the health crisis (from 2019 to 2022), broadly the same as the pre-crisis period. On the other hand, the average household in the wealthiest fifth saw their liquid savings grow by 4,200 pounds," the analysis concludes.
