According to new study, the average employee in the UK would have to work over five decades of earnings to reach the financial standing of the wealthiest 10% of the population.
Growing Wealth Gap Across Decades
The study examined wealth distribution statistics covering the recent health crisis years and determined that back in 2006-08, it would have required nearly four decades of typical employment income to enter the richest segment of the economic ladder.
A research lead involved with the analysis commented: "Financial divides in Britain are currently so significant that a average worker saving all their earnings throughout their career would remain unable to reach the top of the financial hierarchy."
Assessing the Economic Gap
The study revealed that the difference between the assets of the median citizen and an individual in the richest segment was one million pounds in the pre-crisis period, but had expanded to £1.3m in real terms by recent times.
The analyst added: "These differences are particularly worrying as economic movement in Britain is low – those who commence life well-off tend to stay wealthy, and conversely applies."
Proportional Economic Disparity
Although the financial disparity growing in specific figures, the percentage of total wealth in the UK possessed by the richest households – called "comparative financial divide" – has been "mostly consistent since the 1980s era," per the study.
Throughout these years, complete net worth in the UK increased dramatically from three times the gross domestic product, to approximately 7.5x.
Contributors of Financial Divide
Termed "unearned" gains, via rising house prices and adjustments to retirement fund assessments, were the key contributors of the widening wealth gap over the past decade, per the analysis.
These increases generally flowed to older, property-owning households, the analysis reveals – worsening the intergenerational wealth divide.
Intergenerational Economic Gaps
The median economic difference between people in their early 30s and people aged 60-64 more than doubled in actual value, from 135 thousand pounds in the mid-2000s, to £310,000.
Regional Differences
Additionally, there were pronounced area-based disparities, with the median value of wealth in the pandemic period reaching £290k in the SE of England, where housing costs have typically increased quickly, as opposed to 110 thousand pounds in the northeastern region.
Health Crisis Years Consequences
Throughout the COVID period, when numerous employees were covered under the government-supported job retention program, and health crisis restrictions limited opportunities for spending, the data shows many households were able to save, growing their net worth.
Higher-income households performed significantly better, nevertheless. "The typical family in the bottom income bracket saw their liquid savings grow by only eighty pounds throughout the health crisis (across the pandemic timeframe), approximately equivalent to the pre-crisis period. Conversely, the average household in the highest income quintile saw their liquid savings increase by £4,200," the study reveals.
