According to new research, the average worker in the UK would have to work over five decades of income to reach the financial standing of the richest 10% of the population.
Widening Wealth Gap Across Decades
The analysis analyzed financial assets statistics covering the recent health crisis years and found that back in 2006-08, it would have taken 38 years' worth of average worker salary to join the top 10th of the wealth distribution.
A senior economist associated with the report commented: "Economic disparities in Britain are currently so significant that a average worker accumulating their complete salary during their working years would remain unable to reach the top of the wealth ladder."
Measuring the Economic Gap
The analysis discovered that the difference between the wealth of the average person and an individual in the wealthiest decile was one million pounds in 2006-08, but had increased to 1.3 million pounds in actual value by recent times.
The analyst further stated: "These gaps are especially alarming as economic movement in Britain is low – those who commence life wealthy tend to stay wealthy, and vice versa."
Comparative Financial Divide
Despite the wealth gap expanding in actual numbers, the percentage of overall assets in the UK owned by the most affluent homes – known as "comparative financial divide" – has been "mostly consistent since the eighties," per the research.
During this period, total wealth in the UK rose substantially from three times the gross domestic product, to nearly seven and a half times.
Factors of Economic Disparity
Termed "passive" gains, through growing real estate costs and adjustments to pension valuations, were the main drivers of the growing financial disparity over the past decade, per the report.
These increases typically went to older, property-owning households, the analysis reveals – worsening the age-based economic gap.
Intergenerational Wealth Disparities
The median economic difference between individuals aged 30-34 and people aged 60-64 increased over twofold in real terms, from £135,000 in the mid-2000s, to £310,000.
Area-Based Variations
There were also pronounced regional variations, with the average level of wealth in recent years standing at 290 thousand pounds in the southeastern region, where property prices have generally grown substantially, as opposed to £110k in the north-east.
COVID Era Effects
Amid the health crisis, when millions of workers were protected by the taxpayer-backed furlough scheme, and pandemic lockdowns limited opportunities for spending, the data shows numerous families were in a position to set aside money, enhancing their financial standing.
Wealthier families achieved superior outcomes, nevertheless. "The average household in the poorest fifth saw their available funds increase by just £80 during the COVID years (from 2019 to 2022), approximately equivalent to the 24 months before COVID. In contrast, the typical family in the wealthiest fifth saw their available funds grow by 4,200 pounds," the analysis concludes.
