Per new study, the typical earner in the UK would need 52 years' worth of salary to attain the financial standing of the richest 10% of the population.
Growing Economic Disparity Over Time
The study reviewed wealth distribution statistics from the Covid pandemic period and found that during the mid-2000s, it would have required 38 years' worth of average worker salary to join the top 10th of the wealth distribution.
A research lead involved with the report commented: "Financial divides in Britain are presently so substantial that a average worker accumulating their complete salary during their working years would continue to be incapable to achieve the peak of the economic scale."
Quantifying the Wealth Divide
The research discovered that the gap between the assets of the median citizen and an individual in the richest segment was one million pounds in the mid-2000s, but had widened to 1.3 million pounds in real terms by 2020-22.
The researcher further stated: "These disparities are particularly worrying as financial progression in Britain is low – individuals who begin life affluent tend to continue being rich, and the opposite holds true."
Proportional Economic Disparity
Although the financial disparity growing in actual numbers, the share of total wealth in the UK held by the wealthiest families – called "comparative financial divide" – has been "largely unchanged since the 1980s era," per the research.
Throughout these years, overall assets in the UK rose substantially from thrice the gross domestic product, to almost 7.5 times.
Factors of Economic Disparity
Termed "passive" appreciation, via increasing property values and adjustments to superannuation evaluations, were the main drivers of the growing financial disparity from 2010 onward, according to the study.
These appreciations tended to accrue to senior citizens with real estate, the research shows – intensifying the intergenerational wealth divide.
Intergenerational Wealth Disparities
The average wealth gap between people in their early 30s and people aged 60-64 grew by more than 100% 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 wealth in the pandemic period reaching £290k in the southeastern region, where housing costs have tended to rise rapidly, compared with 110 thousand pounds in the NE of England.
Pandemic Period Consequences
During the pandemic, when numerous employees were covered under the government-supported job retention program, and Covid shutdowns limited opportunities for spending, the data shows numerous families were in a position to set aside money, increasing their wealth.
Higher-income households performed significantly better, though. "The median home in the lowest-income quintile saw their liquid savings grow by only eighty pounds throughout the health crisis (2019-20 to 2021-22), roughly identical to the pre-crisis period. Conversely, the median home in the wealthiest fifth saw their liquid savings increase by £4,200," the report finds.
