Per recent study, the median worker in the UK would require half a century of income to attain the wealth level of the wealthiest 10% in the country.
Expanding Financial Divide Over Time
The study analyzed financial assets information from the recent health crisis years and determined that back in the mid-2000s, it would have needed 38 years' worth of average worker salary to enter the richest segment of the financial hierarchy.
A senior economist involved with the study observed: "Wealth gaps 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 attain the highest level of the wealth ladder."
Measuring the Economic Gap
The study revealed that the gap between the wealth of the typical individual and someone in the top 10% was £1m in the mid-2000s, but had widened to £1.3 million in actual value by the pandemic years.
The researcher added: "These gaps are especially alarming as wealth mobility in Britain is low – people that start life affluent tend to continue being rich, and vice versa."
Proportional Economic Disparity
Although the financial disparity widening in absolute terms, the share of overall assets in the UK held by the wealthiest families – termed "proportional economic disparity" – has been "largely unchanged since the 1980s era," per the analysis.
During this period, complete net worth in the UK increased dramatically from thrice the annual GDP, to approximately 7.5x.
Factors of Economic Disparity
Termed "unearned" gains, through increasing property values and changes in superannuation evaluations, were the main drivers of the widening wealth gap since 2010, according to the analysis.
These appreciations generally flowed to elderly homeowners, the study demonstrates – intensifying the generational financial disparity.
Intergenerational Economic Gaps
The median economic difference between thirty-somethings and those in their early 60s more than doubled in inflation-adjusted terms, from 135 thousand pounds in the mid-2000s, to 310 thousand pounds.
Regional Differences
Additionally, there were stark regional variations, with the average level of assets in recent years amounting to £290k in the southeastern region, where real estate values have typically increased quickly, versus £110,000 in the northeastern region.
Pandemic Period Impact
Throughout the COVID period, when numerous employees were covered under the taxpayer-backed furlough scheme, and Covid shutdowns curtailed consumption options, the statistics indicate many households were capable of accumulating, enhancing their financial standing.
Wealthier families fared much better, though. "The typical family in the bottom income bracket saw their available funds rise by merely £80 throughout the health crisis (2019-20 to 2021-22), broadly the same as the two years pre-pandemic. On the other hand, the average household in the wealthiest fifth saw their cash reserves increase by £4,200," the study reveals.
