Based on fresh research, the typical earner in the UK would have to work 52 years' worth of salary to reach the financial standing of the most affluent 10% of the population.
Widening Economic Disparity Over Time
The analysis reviewed financial assets data from the recent health crisis years and discovered that in the pre-financial crisis era, it would have needed 38 years of median full-time earnings to enter the top 10th of the financial hierarchy.
A senior economist associated with the report commented: "Economic disparities in Britain are presently so substantial that a regular employee accumulating their complete salary during their working years would remain unable to attain the highest level of the wealth ladder."
Quantifying the Wealth Divide
The research discovered that the difference between the wealth of the typical individual and an individual in the top 10% was £1m in the mid-2000s, but had increased to 1.3 million pounds in real terms by the pandemic years.
The economist added: "These gaps are doubly concerning as economic movement in Britain is limited – those who commence life affluent tend to remain affluent, and conversely applies."
Comparative Financial Divide
Even with the economic divide growing in specific figures, the percentage of overall assets in the UK possessed by the most affluent homes – termed "relative wealth inequality" – has been "broadly stable since the 1980s era," according to the study.
During this period, total wealth in the UK rose substantially from three times the annual GDP, to approximately 7.5x.
Contributors of Financial Divide
So-called "automatic" increases, via growing real estate costs and adjustments to superannuation evaluations, were the main drivers of the expanding economic divide over the past decade, as stated in the report.
These increases generally flowed to older, property-owning households, the analysis reveals – worsening the generational financial disparity.
Generational Wealth Disparities
The median economic difference between people in their early 30s and those in their early 60s grew by more than 100% in real terms, from 135 thousand pounds in 2006-08, to £310k.
Geographic Disparities
There were also pronounced area-based disparities, with the median value of net worth in the pandemic period amounting to 290 thousand pounds in the southeastern region, where real estate values have generally grown substantially, compared with 110 thousand pounds in the north-east.
Health Crisis Years Consequences
Throughout the COVID period, when millions of workers were supported by the taxpayer-backed furlough scheme, and Covid shutdowns curtailed consumption options, the information reveals numerous families were able to save, growing their net worth.
Higher-income households fared much better, however. "The average household in the lowest-income quintile saw their available funds increase by just £80 during the COVID years (2019-20 to 2021-22), roughly identical to the pre-crisis period. In contrast, the typical family in the top income bracket saw their liquid savings increase by £4,200," the report finds.
