Based on new research, the typical earner in the UK would need 52 years' worth of salary to attain the net worth of the most affluent 10% in the country.
Growing Economic Disparity Over Time
The analysis reviewed financial assets information from the recent health crisis years and found that in the pre-financial crisis era, it would have required 38 years of median full-time earnings to enter the top 10th of the economic ladder.
A research lead associated with the study stated: "Financial divides in Britain are currently so significant that a typical full-time employee accumulating their complete salary across their entire working life would continue to be incapable to reach the top of the financial hierarchy."
Assessing the Financial Disparity
The analysis revealed that the disparity between the net worth of the average person and an individual in the richest segment was one million pounds in the pre-crisis period, but had expanded to 1.3 million pounds in actual value by recent times.
The economist further stated: "These gaps are particularly worrying as economic movement in Britain is low – people that start life well-off tend to stay wealthy, and conversely applies."
Comparative Financial Divide
Although the wealth gap growing in actual numbers, the percentage of total wealth in the UK possessed by the richest households – termed "relative wealth inequality" – has been "broadly stable since the 1980s era," as stated in the study.
Over this timeframe, complete net worth in the UK surged from three times the annual GDP, to almost 7.5 times.
Contributors of Economic Disparity
Referred to as "automatic" increases, by means of increasing property values and adjustments to pension valuations, were the main drivers of the growing financial disparity from 2010 onward, as stated in the analysis.
These gains typically went to older, property-owning households, the analysis reveals – worsening the age-based economic gap.
Intergenerational Economic Gaps
The median economic difference between people in their early 30s and people aged 60-64 grew by more than 100% in inflation-adjusted terms, from £135k in 2006-08, to 310 thousand pounds.
Geographic Differences
Additionally, there were stark regional variations, with the average level of wealth in recent years reaching 290 thousand pounds in south-east England, where property prices have generally grown substantially, versus 110 thousand pounds in the NE of England.
Health Crisis Years Impact
Throughout the COVID period, when numerous employees were protected by the taxpayer-backed furlough scheme, and pandemic lockdowns limited opportunities for spending, the data shows many households were able to save, growing their net worth.
Wealthier families fared much better, nevertheless. "The typical family in the lowest-income quintile saw their liquid savings increase by just £80 throughout the health crisis (from 2019 to 2022), roughly identical to the 24 months before COVID. Conversely, the median home in the highest income quintile saw their available funds grow by 4,200 pounds," the analysis concludes.
