According to new study, the median earner in the UK would need 52 years' worth of earnings to reach the wealth level of the richest 10% of the population.
Growing Economic Disparity Across Decades
The study analyzed net worth statistics covering the 2020-22 timeframe and found that back in 2006-08, it would have required 38 years of average worker salary to join the top 10th of the financial hierarchy.
A senior economist part of the study observed: "Economic disparities in Britain are now so large that a typical full-time employee saving all their earnings across their entire working life would still not be able to attain the highest level of the wealth ladder."
Quantifying the Economic Gap
The analysis found that the gap between the wealth of the average person and someone in the wealthiest decile was one million pounds in the pre-crisis period, but had increased to 1.3 million pounds in real terms by 2020-22.
The analyst continued: "These disparities are doubly concerning as economic movement in Britain is low – those who commence life well-off tend to stay wealthy, and conversely applies."
Comparative Financial Divide
Despite the financial disparity growing in specific figures, the share of total wealth in the UK possessed by the most affluent homes – termed "relative wealth inequality" – has been "largely unchanged since the eighties," according to the study.
During this period, overall assets in the UK increased dramatically from thrice the yearly economic output, to nearly seven and a half times.
Factors of Economic Disparity
Termed "passive" appreciation, by means of growing real estate costs and changes in superannuation evaluations, were the main drivers of the widening wealth gap since 2010, according to the study.
These appreciations typically went to older, property-owning households, the analysis reveals – intensifying the intergenerational wealth divide.
Age-Based Economic Gaps
The average wealth gap between individuals aged 30-34 and those in their early 60s increased over twofold in inflation-adjusted terms, from £135,000 in the mid-2000s, to 310 thousand pounds.
Geographic Differences
Furthermore, the study revealed significant regional variations, with the average level of wealth in the pandemic period amounting to 290 thousand pounds in the SE of England, where property prices have tended to rise rapidly, as opposed to 110 thousand pounds in the north-east.
Pandemic Period Impact
During the pandemic, when numerous employees were protected by the public-funded employment protection, and Covid shutdowns limited opportunities for spending, the statistics indicate countless homes were able to save, increasing their wealth.
More affluent homes fared much better, however. "The median home in the lowest-income quintile saw their cash reserves increase by just £80 over the pandemic period (from 2019 to 2022), roughly identical to the two years pre-pandemic. On the other hand, the typical family in the wealthiest fifth saw their cash reserves rise by £4,200," the analysis concludes.
