According to new research, the average employee in the UK would require 52 years' worth of income to achieve the wealth level of the richest 10% of the population.
Growing Economic Disparity Through the Years
This research reviewed financial assets information from the recent health crisis years and determined that during the pre-financial crisis era, it would have needed 38 years' worth of typical employment income to join the top 10th of the wealth distribution.
A senior economist involved with the study stated: "Economic disparities in Britain are presently so substantial that a regular employee setting aside their entire income across their entire working life would still not be able to reach the top of the wealth ladder."
Measuring the Economic Gap
The research discovered that the gap between the net worth of the median citizen and a person belonging to the top 10% was £1 million in 2006-08, but had increased to £1.3m in inflation-adjusted terms by 2020-22.
The analyst continued: "These differences are particularly worrying as wealth mobility in Britain is low – people that start life well-off tend to remain affluent, and conversely applies."
Relative Wealth Inequality
Despite the wealth gap growing in absolute terms, the share of overall assets in the UK owned by the richest households – known as "proportional economic disparity" – has been "broadly stable since the 1980s era," according to the research.
Over this timeframe, overall assets in the UK rose substantially from thrice the gross domestic product, to nearly seven and a half times.
Factors of Economic Disparity
So-called "passive" appreciation, via increasing property values and variations in retirement fund assessments, were the primary factors of the growing financial disparity since 2010, according to the analysis.
These appreciations typically went to senior citizens with real estate, the study demonstrates – exacerbating the intergenerational wealth divide.
Age-Based Wealth Disparities
The average wealth gap between individuals aged 30-34 and people aged 60-64 increased over twofold in real terms, from £135k in 2006-08, to £310k.
Geographic Disparities
Furthermore, the study revealed pronounced regional variations, with the typical amount of assets in recent years amounting to £290,000 in the SE of England, where property prices have typically increased quickly, versus £110k in the NE of England.
Pandemic Period Impact
Amid the health crisis, when millions of workers were covered under the taxpayer-backed furlough scheme, and health crisis restrictions curtailed consumption options, the information reveals numerous families were capable of accumulating, increasing their wealth.
More affluent homes performed significantly better, though. "The median home in the lowest-income quintile saw their liquid savings increase by just £80 over the pandemic period (across the pandemic timeframe), roughly identical to the pre-crisis period. Conversely, the typical family in the wealthiest fifth saw their liquid savings grow by 4,200 pounds," the study reveals.
