Per new study, the typical worker in the UK would require 52 years' worth of income to attain the net worth of the richest 10% in the country.
Growing Economic Disparity Across Decades
The study analyzed financial assets information from the recent health crisis years and discovered that back in the mid-2000s, it would have needed 38 years' worth of typical employment income to reach the top 10th of the economic ladder.
A senior economist associated with the report observed: "Financial divides in Britain are now so large that a regular employee setting aside their entire income during their working years would remain unable to achieve the peak of the wealth ladder."
Measuring the Economic Gap
The study revealed that the difference between the wealth of the typical individual and an individual in the wealthiest decile was £1m in the mid-2000s, but had widened to £1.3 million in actual value by 2020-22.
The researcher continued: "These gaps are particularly worrying as economic movement in Britain is restricted – individuals who begin life wealthy tend to stay wealthy, and conversely applies."
Relative Wealth Inequality
Although the wealth gap widening in absolute terms, the share of complete net worth in the UK held by the most affluent homes – called "relative wealth inequality" – has been "largely unchanged since the eighties," as stated in the study.
Over this timeframe, total wealth in the UK surged from thrice the gross domestic product, to approximately 7.5x.
Factors of Wealth Inequality
Termed "passive" gains, through growing real estate costs and adjustments to superannuation evaluations, were the primary factors of the widening wealth gap over the past decade, according to the study.
These increases tended to accrue to elderly homeowners, the analysis reveals – worsening the intergenerational wealth divide.
Age-Based Wealth Disparities
The average wealth gap between thirty-somethings and people aged 60-64 increased over twofold in inflation-adjusted terms, from £135k in the mid-2000s, to £310,000.
Geographic Variations
Furthermore, the study revealed significant geographic differences, with the average level of assets in the pandemic period amounting to £290,000 in the southeastern region, where property prices have generally grown substantially, as opposed to £110,000 in the north-east.
COVID Era Consequences
Throughout the COVID period, when numerous employees were supported by the government-supported job retention program, and health crisis restrictions curtailed consumption options, the statistics indicate countless homes were in a position to set aside money, increasing their wealth.
Higher-income households achieved superior outcomes, however. "The median home in the bottom income bracket saw their cash reserves grow by only eighty pounds over the pandemic period (across the pandemic timeframe), roughly identical 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.
