Per recent study, the average earner in the UK would need half a century of salary to attain the financial standing of the richest 10% of the population.
Growing Wealth Gap Across Decades
The study analyzed financial assets information including the recent health crisis years and discovered that in the pre-financial crisis era, it would have taken 38 years' worth of average worker salary to reach the top 10th of the economic ladder.
An economic expert part of the study commented: "Financial divides in Britain are now so large that a typical full-time employee saving all their earnings during their working years would still not be able to attain the highest level of the financial hierarchy."
Quantifying the Wealth Divide
The study found that the disparity between the wealth of the median citizen and an individual in the richest segment was £1m in the mid-2000s, but had expanded to 1.3 million pounds in real terms by recent times.
The analyst further stated: "These disparities are doubly concerning as financial progression in Britain is limited – individuals who begin life affluent tend to stay wealthy, and conversely applies."
Relative Wealth Inequality
Despite the wealth gap expanding in absolute terms, the portion of overall assets in the UK possessed by the most affluent homes – termed "comparative financial divide" – has been "broadly stable since the 1980s," per the study.
During this period, total wealth in the UK increased dramatically from triple the annual GDP, to approximately 7.5x.
Factors of Financial Divide
Referred to as "passive" gains, through growing real estate costs and changes in retirement fund assessments, were the main drivers of the growing financial disparity over the past decade, per the analysis.
These increases tended to accrue to elderly homeowners, the research shows – exacerbating the generational financial disparity.
Age-Based Wealth Disparities
The average wealth gap between individuals aged 30-34 and those in their early 60s more than doubled in inflation-adjusted terms, from £135k in pre-financial crisis, to 310 thousand pounds.
Regional Differences
Additionally, there were stark geographic differences, with the median value of wealth in the pandemic period amounting to £290,000 in the SE of England, where real estate values have generally grown substantially, as opposed to £110k in the northeastern region.
Health Crisis Years Effects
During the pandemic, when millions of workers were protected by the public-funded employment protection, and pandemic lockdowns limited opportunities for spending, the statistics indicate numerous families were in a position to set aside money, increasing their wealth.
Higher-income households achieved superior outcomes, though. "The median home in the poorest fifth saw their available funds increase by just £80 throughout the health crisis (2019-20 to 2021-22), roughly identical to the 24 months before COVID. In contrast, the median home in the highest income quintile saw their cash reserves grow by 4,200 pounds," the report finds.