Based on fresh research, the average earner in the UK would need 52 years' worth of earnings to attain the wealth level of the richest 10% in the country.
Growing Wealth Gap Across Decades
The study reviewed wealth distribution statistics including the recent health crisis years and found that in the mid-2000s, it would have needed 38 years' worth of average worker salary to reach the top 10th of the economic ladder.
A research lead associated with the report stated: "Financial divides in Britain are currently so significant that a average worker saving all their earnings during their working years would remain unable to achieve the peak of the economic scale."
Measuring the Economic Gap
The study found that the gap between the net worth of the median citizen and a person belonging to the wealthiest decile was £1m in the pre-crisis period, but had expanded to £1.3m in real terms by recent times.
The analyst added: "These gaps are particularly worrying as wealth mobility in Britain is low – people that start life affluent tend to stay wealthy, and the opposite holds true."
Comparative Financial Divide
Despite the economic divide growing in specific figures, the percentage of total wealth in the UK possessed by the richest households – known as "comparative financial divide" – has been "mostly consistent since the 1980s era," as stated in the research.
Over this timeframe, total wealth in the UK surged from three times the yearly economic output, to approximately 7.5x.
Drivers of Financial Divide
Referred to as "unearned" gains, via growing real estate costs and adjustments to retirement fund assessments, were the primary factors of the widening wealth gap over the past decade, per the study.
These appreciations typically went to elderly homeowners, the study demonstrates – exacerbating the age-based economic gap.
Age-Based Economic Gaps
The typical financial disparity between individuals aged 30-34 and sixty-somethings more than doubled in actual value, from 135 thousand pounds in 2006-08, to £310,000.
Regional Differences
Furthermore, the study revealed significant area-based disparities, with the typical amount of net worth in recent years reaching £290,000 in the SE of England, where housing costs have typically increased quickly, versus 110 thousand pounds in the north-east.
Pandemic Period Impact
During the pandemic, when millions of workers were supported by the government-supported job retention program, and pandemic lockdowns reduced expenditure possibilities, the statistics indicate numerous families were in a position to set aside money, growing their net worth.
Wealthier families performed significantly better, nevertheless. "The average household in the poorest fifth saw their available funds grow by only eighty pounds over the pandemic period (2019-20 to 2021-22), approximately equivalent to the 24 months before COVID. In contrast, the median home in the highest income quintile saw their liquid savings increase by £4,200," the report finds.
