Per fresh analysis, the average earner in the UK would require over five decades of earnings to attain the financial standing of the wealthiest 10% nationwide.
Growing Economic Disparity Across Decades
The analysis examined net worth data from the Covid pandemic period and determined that back in the mid-2000s, it would have needed nearly four decades of typical employment income to enter the richest segment of the financial hierarchy.
A research lead involved with the report stated: "Wealth gaps in Britain are currently so significant that a typical full-time employee saving all their earnings during their working years would still not be able to achieve the peak of the economic scale."
Measuring the Wealth Divide
The analysis revealed that the difference between the wealth of the average person and someone in the richest segment was £1m in the mid-2000s, but had increased to £1.3m in actual value by the pandemic years.
The analyst added: "These differences are doubly concerning as wealth mobility in Britain is limited – those who commence life well-off tend to stay wealthy, and conversely applies."
Relative Wealth Inequality
Even with the wealth gap expanding in actual numbers, the share of complete net worth in the UK held by the most affluent homes – termed "proportional economic disparity" – has been "mostly consistent since the 1980s," as stated in the study.
Throughout these years, overall assets in the UK increased dramatically from triple the gross domestic product, to approximately 7.5x.
Contributors of Wealth Inequality
Termed "passive" appreciation, through increasing property values and variations in retirement fund assessments, were the main drivers of the widening wealth gap since 2010, per the study.
These increases typically went to senior citizens with real estate, the research shows – exacerbating the intergenerational wealth divide.
Generational Wealth Disparities
The median economic difference between thirty-somethings and people aged 60-64 more than doubled in inflation-adjusted terms, from £135k in 2006-08, to 310 thousand pounds.
Area-Based Disparities
Additionally, there were significant area-based disparities, with the median value of assets in recent years amounting to £290k in the SE of England, where housing costs have tended to rise rapidly, compared with £110k in the NE of England.
COVID Era Consequences
Throughout the COVID period, when millions of workers were covered under the public-funded employment protection, and pandemic lockdowns curtailed consumption options, the statistics indicate many households were capable of accumulating, increasing their wealth.
Wealthier families achieved superior outcomes, however. "The average household in the lowest-income quintile saw their available funds grow by only eighty pounds during the COVID years (across the pandemic timeframe), roughly identical to the two years pre-pandemic. On the other hand, the typical family in the highest income quintile saw their available funds grow by 4,200 pounds," the report finds.
