According to fresh analysis, the average earner in the UK would require 52 years' worth of earnings to achieve the financial standing of the wealthiest 10% in the country.
Widening Wealth Gap Across Decades
The analysis analyzed net worth data from the recent health crisis years and determined that back in 2006-08, it would have taken nearly four decades of median full-time earnings to join the top 10th of the economic ladder.
A research lead part of the study stated: "Economic disparities in Britain are now so large that a average worker accumulating their complete salary across their entire working life would remain unable to reach the top of the financial hierarchy."
Assessing the Financial Disparity
The research discovered that the gap between the assets of the average person and an individual in the wealthiest decile was £1 million in the pre-crisis period, but had increased to £1.3 million in actual value by the pandemic years.
The economist added: "These differences are especially alarming as financial progression in Britain is limited – people that start life wealthy tend to continue being rich, and vice versa."
Relative Wealth Inequality
Despite the financial disparity widening in specific figures, the portion of total wealth in the UK possessed by the wealthiest families – called "comparative financial divide" – has been "largely unchanged since the 1980s era," as stated in the analysis.
During this period, complete net worth in the UK increased dramatically from thrice the gross domestic product, to nearly seven and a half times.
Drivers of Economic Disparity
Termed "unearned" gains, via growing real estate costs and changes in superannuation evaluations, were the main drivers of the widening wealth gap over the past decade, according to the report.
These gains typically went to older, property-owning households, the research shows – intensifying the intergenerational wealth divide.
Intergenerational Economic Gaps
The median economic difference between thirty-somethings and sixty-somethings increased over twofold in inflation-adjusted terms, from £135k in pre-financial crisis, to £310k.
Geographic Differences
Additionally, there were pronounced area-based disparities, with the average level of net worth in 2020-22 amounting to £290,000 in the SE of England, where housing costs have tended to rise rapidly, compared with 110 thousand pounds in the north-east.
Health Crisis Years Impact
Amid the health crisis, when millions of workers were protected by the taxpayer-backed furlough scheme, and health crisis restrictions limited opportunities for spending, the data shows countless homes were able to save, growing their net worth.
Wealthier families fared much better, however. "The average household in the poorest fifth saw their available funds grow by only eighty pounds throughout the health crisis (from 2019 to 2022), roughly identical to the two years pre-pandemic. Conversely, the median home in the wealthiest fifth saw their cash reserves grow by 4,200 pounds," the report finds.
