According to recent research, the typical earner in the UK would need 52 years' worth of earnings to attain the financial standing of the wealthiest 10% in the country.
Expanding Economic Disparity Across Decades
This research examined wealth distribution information covering the Covid pandemic period and determined that in the mid-2000s, it would have required nearly four decades of typical employment income to reach the top 10th of the financial hierarchy.
A senior economist part of the analysis commented: "Financial divides in Britain are currently so significant that a typical full-time employee saving all their earnings throughout their career would still not be able to attain the highest level of the wealth ladder."
Quantifying the Financial Disparity
The research found that the difference between the assets of the typical individual and someone in the top 10% was one million pounds in 2006-08, but had expanded to 1.3 million pounds in real terms by the pandemic years.
The researcher continued: "These disparities are doubly concerning as economic movement in Britain is low – people that start life wealthy tend to continue being rich, and vice versa."
Comparative Financial Divide
Although the wealth gap growing in absolute terms, the portion of total wealth in the UK possessed by the wealthiest families – termed "comparative financial divide" – has been "broadly stable since the 1980s era," per the research.
Over this timeframe, overall assets in the UK rose substantially from thrice the annual GDP, to approximately 7.5x.
Factors of Wealth Inequality
Referred to as "passive" gains, through increasing property values and variations in pension valuations, were the primary factors of the expanding economic divide from 2010 onward, as stated in the study.
These increases generally flowed to older, property-owning households, the analysis reveals – worsening the age-based economic gap.
Intergenerational Wealth Disparities
The average wealth gap between people in their early 30s and people aged 60-64 grew by more than 100% in inflation-adjusted terms, from 135 thousand pounds in the mid-2000s, to £310,000.
Area-Based Differences
There were also significant geographic differences, with the median value of wealth in the pandemic period standing at 290 thousand pounds in the southeastern region, where housing costs have generally grown substantially, versus £110k in the north-east.
Pandemic Period Effects
During the pandemic, when millions of workers were protected by the public-funded employment protection, and Covid shutdowns reduced expenditure possibilities, the statistics indicate numerous families were capable of accumulating, growing their net worth.
Higher-income households performed significantly better, though. "The median home in the lowest-income quintile saw their cash reserves increase by just £80 throughout the health crisis (2019-20 to 2021-22), roughly identical to the 24 months before COVID. On the other hand, the typical family in the wealthiest fifth saw their available funds rise by £4,200," the analysis concludes.
