According to fresh study, the average worker in the UK would have to work over five decades of salary to attain the net worth of the wealthiest 10% in the country.
Widening Wealth Gap Over Time
The study reviewed wealth distribution information from the 2020-22 timeframe and found that in the mid-2000s, it would have needed 38 years of average worker salary to reach the wealthiest decile of the economic ladder.
A research lead associated with the report stated: "Economic disparities in Britain are currently so significant that a regular employee saving all their earnings throughout their career would remain unable to reach the top of the wealth ladder."
Quantifying the Wealth Divide
The research found that the difference between the net worth of the typical individual and someone in the wealthiest decile was £1 million in 2006-08, but had widened to 1.3 million pounds in real terms by 2020-22.
The analyst continued: "These differences are doubly concerning as economic movement in Britain is restricted – those who commence life wealthy tend to stay wealthy, and vice versa."
Relative Wealth Inequality
Despite the wealth gap widening in specific figures, the share of overall assets in the UK possessed by the wealthiest families – called "proportional economic disparity" – has been "mostly consistent since the 1980s era," per the study.
During this period, total wealth in the UK rose substantially from three times the gross domestic product, to almost 7.5 times.
Factors of Wealth Inequality
Termed "unearned" appreciation, through rising house prices and changes in pension valuations, were the primary factors of the widening wealth gap over the past decade, according to the analysis.
These gains generally flowed to senior citizens with real estate, the analysis reveals – intensifying the intergenerational wealth divide.
Intergenerational Financial Divides
The average wealth gap between individuals aged 30-34 and those in their early 60s more than doubled in real terms, from £135,000 in 2006-08, to 310 thousand pounds.
Regional Variations
There were also significant regional variations, with the average level of assets in the pandemic period standing at £290k in the SE of England, where real estate values have generally grown substantially, compared with 110 thousand pounds in the NE of England.
Pandemic Period Consequences
During the pandemic, when numerous employees were protected by the government-supported job retention program, and pandemic lockdowns reduced expenditure possibilities, the statistics indicate numerous families were capable of accumulating, enhancing their financial standing.
Higher-income households fared much better, though. "The typical family in the poorest fifth saw their available funds rise by merely £80 during the COVID years (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 available funds grow by 4,200 pounds," the study reveals.
