Why is there a gap between rich and poor in UK?
The richest 1% of households now have an average income of £1,053,000 a year, up from £831,000 in 2015, according to the Office for National Statistics.
But the gap has widened significantly since the financial crisis, with the poorest 10% of families making less than £25,000.
The average wealth for the poorest 50% of UK households is £1.4m, the lowest in Europe, according a report by Oxfam.
This has left a wealth gap of more than £100,000 between the richest and the poorest households.
Why is this important?
A gap like this is very concerning because it suggests that the gap between the rich and the poor in our society is widening, Oxfam said.
What does this mean for people’s retirement?
It is worrying that in some parts of the UK there is a wealth disparity between the highest and lowest earners.
Oxfam has also found that wealth inequality between the poorest and richest households has risen dramatically over the last 20 years.
How much does this impact on people’s finances?
For a person earning £100k, their savings are £50,000 lower than the amount they could have saved for a similar financial goal.
For example, for someone earning £25k, they would have saved £20,000 for a retirement account.
If this money was invested in the stock market, they could make £40,000 per year, or almost £4,000 more than if they had been saving it.
This is because the market is heavily weighted towards investors who are able to make a return on their investment, while the poor are left behind.
But, of course, the rich can also make money off the stock markets, and they have done for many decades.
So how does this affect our economy?
The UK is a wealthy country.
We have a well-paid, highly skilled workforce.
We also have the highest proportion of university graduates in the OECD, according the OECD.
Yet, the vast majority of people living in the UK do not have the resources to retire comfortably.
A study by the Resolution Foundation found that while the majority of households have the funds they need to retire at a reasonable level, the majority still do not.
Why do people get stuck in this situation?
Because we do not invest enough, Oxfos report found.
According to the Resolution foundation, it is “difficult for the wealthy to get rich” because they are often too busy working and saving to invest in a retirement plan.
Even when they do invest, Oxfar said that there are financial and job barriers.
We have an ageing population, with older people retiring earlier than they did in the 1980s.
People who have children have also had to pay more for childcare.
Is there a way out?
As Oxfam says, there is still a lot we do to help people get ahead in retirement.
But if we invest less, we can increase our savings.
One strategy is to invest directly in stocks.
For example, if you invest £100 in a company, you will earn a return of about 4% over 10 years.
This is a much higher return than most people earn on their savings.
This can be an easy way to reduce the wealth gap.
Another option is to get a private pension plan.
This may seem like a radical idea, but it can make a huge difference to people’s financial situation.
When is it right to invest?
We need to be realistic, Oxanavist says.
“People need to know how much money they need, how much they can invest, how long they can live on, how they can provide for their families and friends.
This will give them the confidence to make the change they need.”
What can I do to reduce my wealth gap?
Here are a few things you can do to boost your wealth.
Buy stocks and bonds.
You can invest in stocks in a way that reduces your wealth gap and lets you make more money in the long run.
Investing in stocks means you pay less tax and get a higher return.
Set aside some money for a rainy day fund.
Buying a rainy-day fund, which allows you to put money aside for your future needs, can help to reduce your wealth deficit and help you retire comfortably if you need to.
Get a private health insurance plan.
A private health plan is a good way to pay for your own health insurance, and you can save a lot more on your premiums.
Ask your family doctor or GP if you should be seeing a private healthcare provider, or a specialist.
Take out a mortgage.
Mortgage lenders are increasingly offering mortgages that can be paid off in a lump sum, which can help you reduce your net worth and save for a deposit.
Have a savings account. A savings