Based on recent research, the average earner in the UK would need 52 years' worth of earnings to achieve the financial standing of the wealthiest 10% of the population.
Expanding Financial Divide Through the Years
This research examined net worth statistics covering the recent health crisis years and discovered that in 2006-08, it would have required nearly four decades of typical employment income to join the richest segment of the financial hierarchy.
A research lead involved with the study observed: "Economic disparities in Britain are now so large that a regular employee setting aside their entire income throughout their career would continue to be incapable to reach the top of the financial hierarchy."
Assessing the Financial Disparity
The study found that the gap between the wealth of the typical individual and a person belonging to the top 10% was £1m in the pre-crisis period, but had widened to 1.3 million pounds in actual value by the pandemic years.
The analyst added: "These differences are doubly concerning as financial progression in Britain is limited – those who commence life wealthy tend to continue being rich, and vice versa."
Relative Wealth Inequality
Even with the wealth gap growing in absolute terms, the percentage of complete net worth in the UK owned by the most affluent homes – termed "proportional economic disparity" – has been "largely unchanged since the eighties," per the research.
During this period, overall assets in the UK rose substantially from triple the annual GDP, to nearly seven and a half times.
Contributors of Wealth Inequality
Referred to as "passive" appreciation, through increasing property values and variations in retirement fund assessments, were the primary factors of the growing financial disparity from 2010 onward, according to the report.
These increases tended to accrue to elderly homeowners, the study demonstrates – worsening the generational financial disparity.
Generational Financial Divides
The average wealth gap between individuals aged 30-34 and sixty-somethings increased over twofold in real terms, from 135 thousand pounds in pre-financial crisis, to £310,000.
Geographic Disparities
Additionally, there were significant geographic differences, with the average level of net worth in recent years amounting to £290,000 in the SE of England, where property prices have generally grown substantially, versus £110,000 in the NE of England.
Pandemic Period Consequences
During the pandemic, when millions of workers were covered under the taxpayer-backed furlough scheme, and pandemic lockdowns curtailed consumption options, the statistics indicate countless homes were in a position to set aside money, growing their net worth.
More affluent homes performed significantly better, nevertheless. "The average household in the poorest fifth saw their available funds grow by only eighty pounds during the COVID years (2019-20 to 2021-22), roughly identical to the pre-crisis period. Conversely, the average household in the top income bracket saw their available funds rise by £4,200," the analysis concludes.
