Based on new research, the median employee in the UK would have to work half a century of salary to attain the wealth level of the wealthiest 10% in the country.
Growing Financial Divide Through the Years
The study examined wealth distribution data including the 2020-22 timeframe and found that back in 2006-08, it would have needed nearly four decades of median full-time earnings to join the top 10th of the wealth distribution.
A research lead involved with the study observed: "Wealth gaps in Britain are now so large that a average worker accumulating their complete salary during their working years would still not be able to reach the top of the economic scale."
Measuring the Economic Gap
The analysis found that the difference between the net worth of the median citizen and someone in the richest segment was one million pounds in the pre-crisis period, but had expanded to £1.3 million in actual value by the pandemic years.
The economist further stated: "These gaps are particularly worrying as financial progression in Britain is limited – people that start life wealthy tend to continue being rich, and conversely applies."
Comparative Financial Divide
Despite the economic divide expanding in actual numbers, the portion of complete net worth in the UK possessed by the richest households – called "proportional economic disparity" – has been "largely unchanged since the 1980s," as stated in the study.
During this period, overall assets in the UK surged from triple the gross domestic product, to nearly seven and a half times.
Factors of Financial Divide
Termed "automatic" appreciation, via increasing property values and adjustments to pension valuations, were the primary factors of the growing financial disparity from 2010 onward, according to the study.
These gains tended to accrue to older, property-owning households, the analysis reveals – worsening the age-based economic gap.
Generational Financial Divides
The median economic difference between people in their early 30s and those in their early 60s increased over twofold in actual value, from £135,000 in pre-financial crisis, to £310,000.
Regional Variations
There were also stark area-based disparities, with the average level of wealth in the pandemic period amounting to £290,000 in the southeastern region, where property prices have typically increased quickly, versus £110k in the northeastern region.
Pandemic Period Impact
During the pandemic, when numerous employees were covered under the government-supported job retention program, and pandemic lockdowns reduced expenditure possibilities, the data shows numerous families were able to save, growing their net worth.
Higher-income households fared much better, though. "The typical family in the poorest fifth saw their cash reserves grow by only eighty pounds over the pandemic period (across the pandemic timeframe), approximately equivalent to the pre-crisis period. Conversely, the median home in the wealthiest fifth saw their liquid savings rise by £4,200," the analysis concludes.
