Based on fresh study, the median employee in the UK would have to work 52 years' worth of income to reach the net worth of the richest 10% nationwide.
Widening Wealth Gap Through the Years
The analysis analyzed net worth data from the Covid pandemic period and determined that back in the pre-financial crisis era, it would have taken 38 years' worth of average worker salary to enter the top 10th of the wealth distribution.
A research lead involved with the study commented: "Wealth gaps in Britain are currently so significant that a regular employee setting aside their entire income during their working years would still not be able to attain the highest level of the economic scale."
Quantifying the Financial Disparity
The research found that the gap between the assets of the typical individual and an individual in the wealthiest decile was £1m in 2006-08, but had expanded to 1.3 million pounds in inflation-adjusted terms by recent times.
The researcher continued: "These differences are doubly concerning as economic movement in Britain is limited – people that start life well-off tend to stay wealthy, and conversely applies."
Comparative Financial Divide
Despite the financial disparity widening in absolute terms, the share of overall assets in the UK owned by the richest households – termed "comparative financial divide" – has been "broadly stable since the eighties," per the research.
During this period, complete net worth in the UK surged from triple the yearly economic output, to almost 7.5 times.
Contributors of Financial Divide
So-called "automatic" gains, by means of increasing property values and variations in superannuation evaluations, were the main drivers of the widening wealth gap from 2010 onward, per the analysis.
These increases generally flowed to older, property-owning households, the analysis reveals – worsening the generational financial disparity.
Age-Based Economic Gaps
The average wealth gap between people in their early 30s and those in their early 60s grew by more than 100% in actual value, from £135k in pre-financial crisis, to £310k.
Geographic Disparities
Furthermore, the study revealed pronounced geographic differences, with the median value of net worth in recent years amounting to £290k in south-east England, where real estate values have typically increased quickly, versus £110k in the north-east.
Health Crisis Years Consequences
During the pandemic, when numerous employees were protected by the taxpayer-backed furlough scheme, and pandemic lockdowns reduced expenditure possibilities, the data shows numerous families were able to save, enhancing their financial standing.
Wealthier families performed significantly better, however. "The median home in the poorest fifth saw their liquid savings rise by merely £80 over the pandemic period (across the pandemic timeframe), approximately equivalent to the pre-crisis period. On the other hand, the median home in the top income bracket saw their liquid savings increase by £4,200," the analysis concludes.
