Official statistics suggest that the richest 20% of the U.K. are 100 times wealthier than the poorest 20%; the richest fifth’s annual household income is 5 times greater than the poorest 20% of the U.K. Population, after benefit and taxes are taken into account.
This post provides two accessible ‘headline’ statistics on wealth and income inequality, courtesy of some excellent animated infographics, and then goes on to look at the original data sources and organisations who produce the data in more depth. The point of this post is to both provide and overview of wealth and income inequality in the United Kingdom and to provide some useful links to allow students to explore statistics on wealth and income inequalities in more depth.
Wealth and income inequalities are closely correlated with social class, although economic measurements are just one indicator of social class, which is a broader concept, also encompassing social and cultural capital (if we are going to use the latest social class survey – see here for an introduction to the concept of social class.
Wealth Inequality in the United Kingdom
- The richest 20% are about 100 times richer than the poorest 20% –
- If we represent the wealth of nation as £100 pounds, then the richest 20% have £60 out of every hundred, while the bottom 20% have only 60 pence.
The inequality briefing below provides an overview of how wealth is distributed in the UK. It compares how people think wealth should be distributed, what they think the actual wealth distribution is in the UK, and finally what the actual wealth distribution is.
What people think wealth distribution in the UK should be
How people think wealth is actually distributed in the UK
How wealth is actually distributed in the UK
Income Inequality in the U.K.
- The bosses of Britain’s biggest companies earn 100 times more than the average wage.
- It takes them just three days to earn what a Nurse earns in an entire year.
This video by the High Pay Centre summarises the situation in 2014
- Brenda, nurse, earns £12 an hour, the average wage in the U.K.
- Brian, a chief executive of one of Britain’s biggest companies, earns £1200 an hour, 100 times what Brenda earns.
- It takes Brian just three months to earn what Brenda will earn in her entire working life.
- Brenda’s annual salary of £27 000 has hardly changed at all over the last decade, while the cost of living has increased.
- Brian’s annual salary on the other hand has increased from 2.6 million to 4.3 million over the last decade.
- If we redistributed the income of the U.K. on the same basis of the Netherlands, which would effectively involve reducing the income of the top 1% by a mere 25%, then 99% of us would be an average of £3000/ year better off.
Income inequality in the UK 2014
A fairer income distribution, based on the Netherlands
Further Sources on Wealth and Income Inequalities
The sources below provide a more in-depth focus on the nature and extent of wealth and income inequalities in the United Kingdom today. Click on the links to explore them further!
Source 1 – The Office for National Statistics bi-annual ‘Wealth in Great Britain’ Survey
- The wealthiest 10% of households owned 45% of aggregate total wealth in July 2012 to June 2014.
- The bottom 50% of households owned 9% of aggregate total wealth.
- In 2012-14 the wealthiest 20% of households had 117 times more aggregate total wealth than the least wealthy 20% of households.
- In comparison, the wealthiest 20% of households had 97 times more aggregate total wealth than the least wealthy 20% of households in July 2010 to June 2012.
- The total net wealth of the lowest three decile households (30% of the U.K. population) is approximately £200 million.
- The lowest decile have zero wealth, many such households will have net debt rather than assets.
Source 2 – The Office for National Statistics produces an annual report on ‘Household disposable income and inequality in the UK’
This is the report financial year ending 2016 with some of the main data summarised below…
- Original household income (before cash benefits and direct taxes) for the richest fifth of households was around 12 times higher than the poorest fifth (£85,000 and £7,000 per year respectively)
- Disposable household income (after cash benefits and direct taxes) for the richest fifth was 5 times higher than the poorest fifth (£62,400 and £12,500 per year respectively).
- This shows us that, overall, cash benefits and direct taxes led to income being shared more equally between households
- Over the past year, median disposable income for the poorest fifth of households rose by £700 (5.1%). In contrast the income of the richest fifth of households fell by £1,000 (1.9%) over the same period.
- Looked at over the past decade, the incomes of the poorest fifth of households have increased by approximately 13%, while the incomes of richest fifth of households have fallen by approximately 3%.
- Poverty is a concept that is often linked with wealth (you might crudely say that poverty is the opposite of wealth.
- If you like this sort of thing, you might also like my other relevant posts (forthcoming) on ‘Global wealth inequalities’ and ‘How poverty affects life-chances‘.
- There’s all sorts of reasons why the statistics above on wealth and income in the U.K. may lack validity – some of the reasons are covered in this post: evaluating the usefulness of official statistics.
Even more resources to explore wealth and poverty in more depth…
- How Rich Are You – (Channel Four)
- Income inequality in the UK
- A selection of graphs showing the relationship between social class and life chances (or lack of them (Realsociology blog)
- Rich Kid, Poor Kid – contrasting the lifestyles of one rich girl, one poor girl.
- How the other half live is a good alternative to the above
- Read The Government’s extensive Social Mobility Indicators document
- Watch Bonus YouTube Video – It’s got something to do with social class!