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.
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 Inequalities in the UK
- 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 1 – The Office for National Statistics bi-annual ‘Wealth in Great Britain’ Survey This link will take you to the latest 2014 report… (NB this is STILL the latest report, even in July 2022 when I last checked!).
Income inequalities in the UK 2021
The latest income inequality report focuses a lot on the impact of the chosen government response to the Pandemic.
- The poorest fifth of households had a median income of £14600, after taxes and benefits
- The richest fifth of households had a median income of £62700 after taxes and benefits.
- This means the richest fifth of households in the UK received more than 4 times as much income than the poorest fifth.
The above statistics also suggest that there were some variations in income due to Covid-19, three quintiles got poorer between 2020 and 2021, while the 2nd and 3rd quintiles were slightly better off.
Income inequalities in the UK (from 2016 Report)
I’ve left this material in here because the most recent report (above) had less detail than this, focussing mostly on income changes post-Covid 19!
- 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%.
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 2021.
- 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.