According to fresh research, the average earner in the UK would have to work 52 years' worth of income to reach the financial standing of the wealthiest 10% of the population.
Growing Financial Divide Over Time
The study reviewed financial assets information covering the recent health crisis years and found that back in 2006-08, it would have taken nearly four decades of typical employment income to enter the wealthiest decile of the economic ladder.
An economic expert involved with the report commented: "Financial divides in Britain are now so large that a regular employee saving all their earnings during their working years would remain unable to reach the top of the economic scale."
Measuring the Wealth Divide
The analysis found that the disparity between the net worth of the median citizen and an individual in the top 10% was £1m in 2006-08, but had expanded to 1.3 million pounds in inflation-adjusted terms by the pandemic years.
The economist continued: "These differences are particularly worrying as economic movement in Britain is low – those who commence life wealthy tend to remain affluent, and conversely applies."
Comparative Financial Divide
Even with the wealth gap expanding in actual numbers, the share of complete net worth in the UK owned by the wealthiest families – termed "comparative financial divide" – has been "broadly stable since the 1980s," per the analysis.
Throughout these years, overall assets in the UK rose substantially from thrice the gross domestic product, to nearly seven and a half times.
Drivers of Financial Divide
Termed "unearned" increases, via rising house prices and adjustments to superannuation evaluations, were the main drivers of the widening wealth gap from 2010 onward, per the report.
These gains tended to accrue to older, property-owning households, the study demonstrates – worsening the age-based economic gap.
Intergenerational Economic Gaps
The median economic difference between people in their early 30s and people aged 60-64 more than doubled in inflation-adjusted terms, from £135,000 in the mid-2000s, to 310 thousand pounds.
Geographic Disparities
Additionally, there were significant area-based disparities, with the median value of assets in 2020-22 amounting to £290,000 in south-east England, where real estate values have generally grown substantially, compared with £110k in the north-east.
Pandemic Period Impact
Amid the health crisis, when numerous employees were supported by the public-funded employment protection, and pandemic lockdowns curtailed consumption options, the information reveals countless homes were capable of accumulating, enhancing their financial standing.
More affluent homes fared much better, nevertheless. "The median home in the lowest-income quintile saw their available funds grow by only eighty pounds throughout the health crisis (across the pandemic timeframe), roughly identical to the pre-crisis period. On the other hand, the median home in the highest income quintile saw their cash reserves increase by £4,200," the analysis concludes.
