Per recent study, the typical worker in the UK would need half a century of earnings to reach the wealth level of the most affluent 10% nationwide.
Growing Financial Divide Over Time
The analysis examined net worth data covering the 2020-22 timeframe and determined that back in the pre-financial crisis era, it would have needed 38 years' worth of median full-time earnings to join the top 10th of the economic ladder.
A research lead part of the report commented: "Wealth gaps in Britain are presently so substantial that a average worker setting aside their entire income throughout their career would still not be able to achieve the peak of the economic scale."
Assessing the Economic Gap
The research revealed that the difference between the assets of the median citizen and someone in the top 10% was £1m in 2006-08, but had widened to 1.3 million pounds in inflation-adjusted terms by 2020-22.
The analyst further stated: "These gaps are especially alarming as economic movement in Britain is restricted – people that start life affluent tend to stay wealthy, and vice versa."
Relative Wealth Inequality
Even with the wealth gap widening in absolute terms, the portion of complete net worth in the UK possessed by the richest households – termed "comparative financial divide" – has been "largely unchanged since the eighties," as stated in the research.
Over this timeframe, overall assets in the UK increased dramatically from triple the gross domestic product, to almost 7.5 times.
Drivers of Financial Divide
So-called "unearned" increases, through rising house prices and changes in superannuation evaluations, were the main drivers of the widening wealth gap over the past decade, according to the analysis.
These gains generally flowed to elderly homeowners, the analysis reveals – exacerbating the age-based economic gap.
Age-Based Economic Gaps
The average wealth gap between thirty-somethings and sixty-somethings grew by more than 100% in actual value, from 135 thousand pounds in the mid-2000s, to £310k.
Area-Based Variations
There were also significant regional variations, with the average level of net worth in recent years standing at £290,000 in south-east England, where real estate values have tended to rise rapidly, compared with 110 thousand pounds in the northeastern region.
Pandemic Period Consequences
Amid the health crisis, when millions of workers were protected by the taxpayer-backed furlough scheme, and health crisis restrictions limited opportunities for spending, the statistics indicate numerous families were capable of accumulating, growing their net worth.
More affluent homes fared much better, nevertheless. "The median home in the bottom income bracket saw their liquid savings increase by just £80 during the COVID years (across the pandemic timeframe), approximately equivalent to the pre-crisis period. On the other hand, the average household in the top income bracket saw their available funds rise by £4,200," the report finds.
