According to recent research, the average worker in the UK would need half a century of earnings to reach the wealth level of the most affluent 10% nationwide.
Widening Financial Divide Over Time
The analysis reviewed financial assets statistics covering the 2020-22 timeframe and discovered that during the pre-financial crisis era, it would have needed nearly four decades of median full-time earnings to join the wealthiest decile of the financial hierarchy.
A senior economist associated with the study commented: "Economic disparities in Britain are now so large that a average worker accumulating their complete salary across their entire working life would continue to be incapable to attain the highest level of the economic scale."
Assessing the Economic Gap
The research revealed that the disparity between the assets of the median citizen and a person belonging to the top 10% was £1 million in the pre-crisis period, but had expanded to 1.3 million pounds in inflation-adjusted terms by the pandemic years.
The economist continued: "These differences are doubly concerning as wealth mobility in Britain is low – those who commence life wealthy tend to stay wealthy, and vice versa."
Relative Wealth Inequality
Even with the financial disparity widening in actual numbers, the share of overall assets in the UK owned by the most affluent homes – called "comparative financial divide" – has been "broadly stable since the 1980s," per the analysis.
During this period, overall assets in the UK surged from triple the annual GDP, to approximately 7.5x.
Factors of Financial Divide
Referred to as "passive" appreciation, through rising house prices and variations in retirement fund assessments, were the key contributors of the expanding economic divide since 2010, per the analysis.
These increases tended to accrue to elderly homeowners, the analysis reveals – intensifying the age-based economic gap.
Generational Economic Gaps
The median economic difference between thirty-somethings and people aged 60-64 more than doubled in real terms, from £135k in the mid-2000s, to £310k.
Area-Based Disparities
Furthermore, the study revealed significant regional variations, with the average level of assets in the pandemic period amounting to £290k in south-east England, where real estate values have generally grown substantially, as opposed to £110,000 in the NE of England.
COVID Era Effects
Throughout the COVID period, when millions of workers were protected by the taxpayer-backed furlough scheme, and pandemic lockdowns limited opportunities for spending, the statistics indicate many households were capable of accumulating, increasing their wealth.
Wealthier families performed significantly better, though. "The average household in the poorest fifth saw their cash reserves rise by merely £80 during the COVID years (across the pandemic timeframe), approximately equivalent to the pre-crisis period. Conversely, the average household in the highest income quintile saw their liquid savings increase by £4,200," the report finds.