Based on recent analysis, the median employee in the UK would need half a century of income to attain the wealth level of the most affluent 10% of the population.
Growing Economic Disparity Over Time
The study examined net worth information covering the recent health crisis years and found that back in 2006-08, it would have required 38 years' worth of typical employment income to join the richest segment of the wealth distribution.
A senior economist involved with the analysis stated: "Economic disparities in Britain are now so large that a typical full-time employee setting aside their entire income across their entire working life would continue to be incapable to achieve the peak of the wealth ladder."
Assessing the Financial Disparity
The research revealed that the difference between the net worth of the median citizen and an individual in the richest segment was one million pounds in the mid-2000s, but had increased to £1.3m in actual value by recent times.
The analyst added: "These differences are doubly concerning as financial progression in Britain is limited – individuals who begin life wealthy tend to remain affluent, and conversely applies."
Proportional Economic Disparity
Although the wealth gap growing in absolute terms, the percentage of complete net worth in the UK held by the wealthiest families – termed "proportional economic disparity" – has been "broadly stable since the eighties," according to the research.
Over this timeframe, complete net worth in the UK rose substantially from three times the annual GDP, to approximately 7.5x.
Factors of Financial Divide
Referred to as "unearned" increases, through rising house prices and adjustments to pension valuations, were the key contributors of the widening wealth gap over the past decade, as stated in the analysis.
These appreciations tended to accrue to senior citizens with real estate, the analysis reveals – exacerbating the intergenerational wealth divide.
Age-Based Wealth Disparities
The average wealth gap between people in their early 30s and sixty-somethings more than doubled in real terms, from £135,000 in the mid-2000s, to 310 thousand pounds.
Geographic Disparities
Additionally, there were pronounced geographic differences, with the median value of net worth in 2020-22 amounting to £290k in south-east England, where housing costs have generally grown substantially, as opposed to £110k in the NE of England.
Pandemic Period Consequences
During the pandemic, when millions of workers were covered under the public-funded employment protection, and pandemic lockdowns reduced expenditure possibilities, the statistics indicate numerous families were in a position to set aside money, increasing their wealth.
Wealthier families performed significantly better, nevertheless. "The typical family in the bottom income bracket saw their liquid savings increase by just £80 over the pandemic period (2019-20 to 2021-22), roughly identical to the pre-crisis period. On the other hand, the average household in the top income bracket saw their available funds increase by £4,200," the analysis concludes.
