What is the wealth gap?
The wealth gap refers to the degree of which wealth is unequally distributed within a population. Currently the average median wealth of a household in the UK is £302,500, however with the country split either over or under this figure we have to ask ourselves: How large are the wealth disparities within our nation?
“ The richest 10% of households hold 43% of all wealth. The poorest 50% however own just 9%” (Office of National Statistics)
A large majority of wealth within the UK is generational, normally through inheritance or family support in monetary pursuits e.g. start up businesses. However it can be argued this ‘wealth privilege‘ exists in society at the expense of those with a lower household wealth.
In an ideal world, our society would be one based upon meritocratic values; where everyone would have equal opportunity based upon merit. These opportunities normally apply to situations such as education, job vacancies and eventually career progression. However the wealth gap has introduced a new culture of nepotism within the workplace.
It can be assumed that the wealthiest in society can be viewed as more affluent and therefore will tend to have wider spread connections. This will then help members of those families in gaining high level professional jobs not completely from their own ability but also from already having a ‘foot in the door’.
Wealth and education
Education is the main way of becoming more socially mobile, the likelihood of being employed in a well-paying job is increased if a person has achieved a higher level of education.
Wealthy families have the ability to provide more to their children in order to see them succeed within the education system through the purchase of materials, tutors and potentially paying tuition fees for their children to go to a private school. On the opposite end of scale more disadvantaged families are likely to have children using the free school meal program; who statistically are shown to underachieve within school.
Only 57% of children who are eligible for FSM are assessed as having a good level of development in meeting early learning goals compared to 74% of children from more advantaged households. (Institute for Fiscal Studies)
These differences in achievement begin to severely widen when we look at more advantaged children that attend private schools; 70% of students are university graduates by the age of 26 compared with less than 20% of children from the poorest fifth of households.
Therefore we can see wealthier families utilising their privilege to ensure their children’s success in education as a way of perpetuating the wealth gap as the more advantaged students will continue to go through education to an eventual high-paying career. For more on wealth inequality and its effect upon education click here .
The cost of living crisis
The cost of living crisis has been brought on due to the fall in disposable incomes (adjusted for inflation), meaning the prices of essential goods such as energy and food have been on the rise. For a large amount of families in the UK these price changes have been detrimental.
Disposable income for the poorest fifth of households fell by 4% to £14,500, pair this with a reduction in the amounts of benefits more disadvantaged families can receive, and this makes it near impossible for families already feeling the pressure of paying their bills to stay afloat as prices soar.
Comparatively, the finances of the wealthiest fifth of society remain firmly in the black due to the on average 1.6% increase in their pay. Wealthier families have also managed to weather the complications of the cost of living crisis with more ease than others in society. Mainly because of the larger proportion of disposable income they have as well as the ability to cut down on less necessary items e.g. holidays in order to subsidise the increasing cost of their bills.