According to new research, the median earner in the UK would require 52 years' worth of income to attain the net worth of the richest 10% of the population.
Widening Wealth Gap Across Decades
The study reviewed net worth statistics covering the recent health crisis years and discovered that in 2006-08, it would have taken 38 years of median full-time earnings to join the top 10th of the wealth distribution.
A research lead involved with the study commented: "Financial divides in Britain are now so large that a regular employee setting aside their entire income across their entire working life would continue to be incapable to achieve the peak of the economic scale."
Quantifying the Wealth Divide
The study discovered that the disparity between the net worth of the median citizen and an individual in the top 10% was one million pounds in the pre-crisis period, but had expanded to 1.3 million pounds in real terms by 2020-22.
The analyst further stated: "These gaps are particularly worrying as financial progression in Britain is low – people that start life well-off tend to remain affluent, and vice versa."
Relative Wealth Inequality
Although the economic divide widening in specific figures, the percentage of total wealth in the UK held by the most affluent homes – called "relative wealth inequality" – has been "mostly consistent since the eighties," as stated in the analysis.
During this period, total wealth in the UK surged from thrice the annual GDP, to almost 7.5 times.
Contributors of Financial Divide
So-called "unearned" appreciation, by means of increasing property values and adjustments to pension valuations, were the key contributors of the expanding economic divide over the past decade, according to the analysis.
These increases tended to accrue to senior citizens with real estate, the study demonstrates – exacerbating the generational financial disparity.
Generational Financial Divides
The typical financial disparity between thirty-somethings and those in their early 60s more than doubled in inflation-adjusted terms, from £135k in pre-financial crisis, to £310k.
Geographic Variations
There were also pronounced geographic differences, with the median value of assets in the pandemic period standing at 290 thousand pounds in south-east England, where property prices have tended to rise rapidly, compared with £110k in the northeastern region.
Health Crisis Years Consequences
Throughout the COVID period, when countless laborers were covered under the taxpayer-backed furlough scheme, and Covid shutdowns curtailed consumption options, the statistics indicate countless homes were able to save, increasing their wealth.
More affluent homes performed significantly better, though. "The average household in the lowest-income quintile saw their liquid savings grow by only eighty pounds during the COVID years (from 2019 to 2022), approximately equivalent to the 24 months before COVID. Conversely, the average household in the highest income quintile saw their available funds rise by £4,200," the report finds.
