Per new research, the median worker in the UK would need 52 years' worth of salary to attain the financial standing of the richest 10% nationwide.
Expanding Financial Divide Through the Years
The study reviewed wealth distribution data including the recent health crisis years and found that back in 2006-08, it would have needed nearly four decades of average worker salary to join the richest segment of the economic ladder.
A research lead part of the study stated: "Wealth gaps in Britain are now so large that a regular employee accumulating their complete salary throughout their career would remain unable to attain the highest level of the economic scale."
Measuring the Wealth Divide
The analysis revealed that the gap between the wealth of the median citizen and a person belonging to the richest segment was £1 million in the pre-crisis period, but had widened to £1.3m in inflation-adjusted terms by the pandemic years.
The economist continued: "These gaps are especially alarming as economic movement in Britain is low – individuals who begin life affluent tend to stay wealthy, and conversely applies."
Relative Wealth Inequality
Even with the economic divide widening in specific figures, the percentage of complete net worth in the UK held by the wealthiest families – termed "comparative financial divide" – has been "broadly stable since the 1980s," per the analysis.
Over this timeframe, total wealth in the UK surged from triple the yearly economic output, to almost 7.5 times.
Factors of Financial Divide
So-called "passive" increases, through rising house prices and adjustments to superannuation evaluations, were the primary factors of the expanding economic divide since 2010, according to the study.
These increases generally flowed to older, property-owning households, the research shows – intensifying the age-based economic gap.
Intergenerational Financial Divides
The median economic difference between people in their early 30s and those in their early 60s grew by more than 100% in actual value, from £135,000 in pre-financial crisis, to £310,000.
Area-Based Differences
Furthermore, the study revealed pronounced area-based disparities, with the median value of assets in 2020-22 standing at £290,000 in south-east England, where property prices have tended to rise rapidly, as opposed to £110,000 in the NE of England.
Health Crisis Years Consequences
Amid the health crisis, when countless laborers were protected by the public-funded employment protection, and health crisis restrictions reduced expenditure possibilities, the statistics indicate many households were capable of accumulating, growing their net worth.
Higher-income households achieved superior outcomes, nevertheless. "The median home in the bottom income bracket saw their liquid savings increase by just £80 during the COVID years (2019-20 to 2021-22), roughly identical to the pre-crisis period. On the other hand, the average household in the wealthiest fifth saw their liquid savings rise by £4,200," the report finds.
