Per new research, the typical earner in the UK would require 52 years' worth of earnings to attain the wealth level of the most affluent 10% in the country.
Widening Economic Disparity Through the Years
The analysis analyzed financial assets information from the recent health crisis years and found that back in 2006-08, it would have taken nearly four decades of typical employment income to reach the wealthiest decile of the economic ladder.
A senior economist associated with the report observed: "Economic disparities in Britain are presently so substantial that a typical full-time employee setting aside their entire income across their entire working life would continue to be incapable to reach the top of the wealth ladder."
Quantifying the Economic Gap
The research discovered that the gap between the assets of the average person and someone in the top 10% was £1m in the mid-2000s, but had expanded to 1.3 million pounds in inflation-adjusted terms by recent times.
The analyst continued: "These differences are especially alarming as financial progression in Britain is low – individuals who begin life wealthy tend to remain affluent, and conversely applies."
Relative Wealth Inequality
Even with the wealth gap growing in absolute terms, the share of total wealth in the UK held by the richest households – known as "relative wealth inequality" – has been "broadly stable since the 1980s era," according to the study.
Throughout these years, overall assets in the UK surged from thrice the gross domestic product, to nearly seven and a half times.
Factors of Wealth Inequality
Referred to as "unearned" gains, via increasing property values and changes in superannuation evaluations, were the primary factors of the growing financial disparity over the past decade, as stated in the study.
These increases typically went to older, property-owning households, the study demonstrates – worsening the age-based economic gap.
Age-Based Wealth Disparities
The average wealth gap between individuals aged 30-34 and those in their early 60s grew by more than 100% in real terms, from £135,000 in the mid-2000s, to £310,000.
Geographic Disparities
There were also pronounced regional variations, with the average level of assets in the pandemic period standing at 290 thousand pounds in south-east England, where housing costs have generally grown substantially, as opposed to £110k in the north-east.
Pandemic Period Effects
During the pandemic, when numerous employees were covered under the taxpayer-backed furlough scheme, and health crisis restrictions limited opportunities for spending, the information reveals many households were in a position to set aside money, enhancing their financial standing.
Higher-income households achieved superior outcomes, though. "The average household in the bottom income bracket saw their liquid savings increase by just £80 throughout the health crisis (2019-20 to 2021-22), roughly identical to the two years pre-pandemic. In contrast, the typical family in the top income bracket saw their available funds grow by 4,200 pounds," the study reveals.
