Based on new study, the average earner in the UK would need 52 years' worth of salary to achieve the net worth of the richest 10% of the population.
Growing Wealth Gap Through the Years
The study reviewed financial assets data covering the 2020-22 timeframe and discovered that back in the mid-2000s, it would have required 38 years' worth of typical employment income to reach the wealthiest decile of the economic ladder.
An economic expert part of the report stated: "Economic disparities in Britain are now so large that a average worker setting aside their entire income throughout their career would remain unable to achieve the peak of the wealth ladder."
Quantifying the Financial Disparity
The study revealed that the disparity between the net worth of the typical individual and a person belonging to the richest segment was £1 million in the mid-2000s, but had widened to £1.3m in real terms by the pandemic years.
The researcher continued: "These disparities are especially alarming as economic movement in Britain is restricted – those who commence life affluent tend to stay wealthy, and the opposite holds true."
Relative Wealth Inequality
Even with the financial disparity growing in actual numbers, the percentage of overall assets in the UK possessed by the richest households – termed "comparative financial divide" – has been "mostly consistent since the eighties," as stated in the study.
During this period, total wealth in the UK surged from triple the annual GDP, to almost 7.5 times.
Drivers of Wealth Inequality
Termed "unearned" gains, via rising house prices and adjustments to superannuation evaluations, were the main drivers of the expanding economic divide over the past decade, according to the study.
These appreciations generally flowed to older, property-owning households, the research shows – worsening the age-based economic gap.
Age-Based Economic Gaps
The average wealth gap between people in their early 30s and those in their early 60s increased over twofold in real terms, from £135,000 in pre-financial crisis, to 310 thousand pounds.
Area-Based Disparities
Additionally, there were significant area-based disparities, with the median value of assets in 2020-22 amounting to £290,000 in the SE of England, where property prices have generally grown substantially, compared with £110,000 in the north-east.
COVID Era Consequences
During the pandemic, when countless laborers were protected by the taxpayer-backed furlough scheme, and Covid shutdowns limited opportunities for spending, the data shows numerous families were capable of accumulating, increasing their wealth.
More affluent homes performed significantly better, however. "The average household in the bottom income bracket saw their available funds grow by only eighty pounds throughout the health crisis (2019-20 to 2021-22), roughly identical to the two years pre-pandemic. On the other hand, the median home in the top income bracket saw their liquid savings rise by £4,200," the analysis concludes.
