Income in the United Kingdom
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This article is outdated. (January 2013) |
In terms of global poverty criteria, the United Kingdom is a wealthy country, with virtually no people living on less than £4 a day. There is both significant income redistribution and income inequality; For instance in 2008/09 income in the top and bottom fifth of households was £73,800 and £5,000 respectively before taxes and benefits. After tax and benefits household income disparities are significantly reduced (to £53,900 and £13,600 respectively).1
The UK Gini coefficient is estimated at 0.36. There were over 619,000 net worth Sterling millionaires in Britain in 2011,2 and 383,000 dollar millionaires (financial assets only) in 2004.3 The main sources for statistics on UK income are HM Revenue and Customs (HMRC) and the Office for National Statistics.
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Taxable income
April 2010 median gross weekly earnings for full-time employees were £499.4
After tax, the average British family in 2002 was left with an average of £24,407 in disposable income, compared with £22,668 for the average French family, £22,665 for the average German family, £19,411 for the average Spanish family, and £17,051 for the average Italian family.5 In 2003, the median wage was £20,000.6 In 2006, average gross hourly pay for full-time and part-time men and women in the UK as a whole was £12.50 an hour.7 In 2011, average individual earnings for full-time workers in Britain were £26,000 (dropping to £21,000 when part-time workers are included), while the average income for working-age households was around £33,000.8 That same year, the after-tax earnings of the median household was around £26,000 per annum9 while average net household income (after tax) stood at £38,547.10
In 2008, median hourly earnings (excluding overtime) for men was £12.50, and £10.91 for women. In 2010, the median wage in the UK for all jobs was £20,801.11 A year later, a Department for Work and Pensions spokeswoman defined £15,000 as “quite a good wage.”12
In 2010, the real adjusted gross disposable income of households per capita in PPS in the United Kingdom was 21919.13 In 2011, the average household net-adjusted disposable income is 26,552 USD per annum,14 while the median annual salary was £21,326.15 In April 2012, average gross weekly earnings for full-time employees were £506, an increase of 1.5 % cent from £498 in 2011. This brought the average full-time wage to £26,500.16
Data from HMRC 2004-2005; incomes are before tax for individuals. The personal allowance or income tax threshold was £4,745 (people with incomes below this level did not pay income tax). The mean income was £22,800 per year with the average Briton paying £4,060 in income tax.
| Range | Number of taxpayers |
|---|---|
| £4,745 to £6,000 | 1,440,000 |
| £6,000 to £7,000 | 1,160,000 |
| £7,000 to £8,000 | 1,590,000 |
| £8,000 to £10,000 | 2,950,000 |
| £10,000 to £12,000 | 2,760,000 |
| £12,000 to £15,000 | 3,650,000 |
| £15,000 to £20,000 | 4,950,000 |
| £20,000 to £30,000 | 6,000,000 |
| £30,000 to £50,000 | 4,090,000 |
| £50,000 to £70,000 | 859,000 |
| £70,000 to £100,000 | 410,000 |
| £100,000 to £200,000 | 300,000 |
| £200,000 to £500,000 | 89,000 |
| £500,000 to £1 million | 16,000 |
| Over £1 million | 6,000 |
Percentile points for income of individuals before tax
For tax years 1999-00 to 2012-13 except 2008-09.17
| 1% | 5% | 10% | 25% | 50% | 75% | 90% | 95% | 99% | Mean | |
|---|---|---|---|---|---|---|---|---|---|---|
| 1999-00 | £4,600 | £5,630 | £6,570 | £9,260 | £14,400 | £22,300 | £33,000 | £44,600 | £96,400 | £19,600 |
| 2000-01 | £4,620 | £5,520 | £6,480 | £9,280 | £14,800 | £23,000 | £34,200 | £46,700 | £102,000 | £20,300 |
| 2001-02 | £4,780 | £5,850 | £6,860 | £9,910 | £15,500 | £24,300 | £36,200 | £49,200 | £107,000 | £21,400 |
| 2002-03 | £4,860 | £5,960 | £6,970 | £10,000 | £15,800 | £24,700 | £36,700 | £49,800 | £108,000 | £21,600 |
| 2003-04 | £4,820 | £5,850 | £7,000 | £10,100 | £16,000 | £25,100 | £37,100 | £50,600 | £111,000 | £21,900 |
| 2004-05 | £4,980 | £6,070 | £7,260 | £10,300 | £16,400 | £26,100 | £39,000 | £52,400 | £117,000 | £22,800 |
| 2005-06 | £5,200 | £6,350 | £7,610 | £10,800 | £17,100 | £27,400 | £41,300 | £56,200 | £132,000 | £24,300 |
| 2006-07 | £5,410 | £6,600 | £7,880 | £11,200 | £17,700 | £28,400 | £42,900 | £58,500 | £141,000 | £25,500 |
| 2007-08 | £5,600 | £6,870 | £8,240 | £11,800 | £18,500 | £29,500 | £44,900 | £61,500 | £149,000 | £26,800 |
| 2009-10 | £6,800 | £7,970 | £9,510 | £12,900 | £19,600 | £30,900 | £46,600 | £63,200 | £149,000 | £28,400 |
| 2010-11 | £6,800 | £7,990 | £9,530 | £13,000 | £19,600 | £31,000 | £46,700 | £63,400 | £147,000 | £27,400 |
| 2011-12 | £7,800 | £9,030 | £10,410 | £13,800 | £20,600 | £32,200 | £48,600 | £66,100 | £153,000 | £29,000 |
| 2012-13 | £8,430 | £9,690 | £11,070 | £14,500 | £21,300 | £33,300 | £50,500 | £68,500 | £156,000 | £29,900 |
Income distribution across age bands
Source for tax year 2004-05. To estimate for 2010-11, increase by 22% to allow for inflation.18
| Age band | Median income | Mean income | Median income (men) | Mean income (men) | Median income (women) | Mean income (women) |
|---|---|---|---|---|---|---|
| Under 20 | £ 8,130 | £ 9,570 | £ 8,490 | £ 9,810 | £ 7,990 | £ 9,250 |
| 20 – 24 | £ 11,800 | £ 13,200 | £ 12,400 | £ 13,800 | £ 11,200 | £ 12,300 |
| 25 – 29 | £ 17,000 | £ 19,300 | £ 17,800 | £ 20,600 | £ 15,900 | £ 17,800 |
| 30 – 34 | £ 19,500 | £ 23,900 | £ 21,600 | £ 26,700 | £ 16,400 | £ 20,100 |
| 35 – 39 | £ 20,100 | £ 26,800 | £ 23,600 | £ 31,700 | £ 15,500 | £ 20,100 |
| 40 – 44 | £ 20,200 | £ 28,100 | £ 24,600 | £ 34,600 | £ 14,900 | £ 19,800 |
| 45 – 49 | £ 20,300 | £ 28,600 | £ 24,800 | £ 35,400 | £ 15,200 | £ 20,100 |
| 50 – 54 | £ 19,300 | £ 27,000 | £ 23,500 | £ 33,400 | £ 15,100 | £ 19,200 |
| 55 – 59 | £ 17,200 | £ 24,500 | £ 20,900 | £ 29,900 | £ 13,100 | £ 17,200 |
| 60 – 64 | £ 13,600 | £ 20,000 | £ 16,500 | £ 24,300 | £ 10,700 | £ 14,200 |
| 65 – 69 | £ 12,600 | £ 17,900 | £ 13,600 | £ 19,500 | £ 11,100 | £ 14,800 |
| 70 – 74 | £ 13,300 | £ 18,100 | £ 15,600 | £ 21,100 | £ 10,700 | £ 14,300 |
| Over 75 | £ 12,400 | £ 16,700 | £ 15,300 | £ 19,900 | £ 10,400 | £ 14,100 |
Income distribution across UK regions
- Office for National Statistic 200719
| UK region | Gross income |
|---|---|
| London | £27,868 |
| South East England | £21,109 |
| East Anglia | £19,469 |
| Scotland | £19,282 |
| North West England | £19,236 |
| West Midlands | £18,801 |
| South West England | £18,629 |
| Yorkshire & the Humber | £18,614 |
| East Midlands | £18,321 |
| Wales | £17,651 |
| North East England | £17,594 |
Income distribution by job type
Median earnings between different job types in 2010 can be seen here.
The graph was originally published here Further information can be obtained from the 2010 Annual Survey of Hours and Earnings (ASHE)
Post tax household income
The data below is taken from the Institute for Fiscal Studies and is based on a household with two adults and no children for 2006. This is taken from the Household income survey and includes net income after all taxes and including any social security benefits (i.e. the amount of money people actually have to spend). These figures can be converted to match household composition using an -equivalence scale
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The factual accuracy of parts of this article (those related to table) may be compromised due to out-of-date information. (January 2013) |
| Annual net household income | Percentile point |
|---|---|
| £5,000 | 3% |
| £10,000 | 10% |
| £15,000 | 31% |
| £20,000 | 50% |
| £25,000 | 66% |
| £30,000 | 77% |
| £35,000 | 85% |
| £40,000 | 90% |
| £45,000 | 93% |
| £50,000 | 95% |
| £60,000 | 97% |
| £75,000 | 99% |
Wealth
The net worth information is based on data from the HMRC for 2004–200520 and includes marketable assets including house equity, cash, shares, bonds and investment trusts. These values do not include personal possessions.
| Percentile point | Wealth to qualify | Percentage of total wealth owned by people at and above this level |
|---|---|---|
| Top 1% | £688,228 | 21% of total UK wealth |
| 2% | £460,179 | 28% of total UK wealth |
| 5% | £270,164 | 40% of total UK wealth |
| 10% | £176,221 | 53% of total UK wealth |
| 25% | £76,098 | 72% of total UK wealth |
| 50% | £35,807 | 93% of total UK wealth |
High income
The Institute for Fiscal Studies issued a report on Britain's highest earners in January 2008. The report is available here. There are 42 million adults in Britain of whom 29 million are income tax payers. (The remainder are pensioners, students, homemakers, unemployed, those earning under the personal allowance, and unwaged other.) A summary of key findings is shown in the table below:
| All taxpayers | Top 10% to 1% (adults) | Top 1% to 0.1% (adults) | Top 0.1% (adults) | |
|---|---|---|---|---|
| Number | 29.5 million | 4.21 million | 421,000 | 42,000 |
| Entry level for group | £5,093 | £35,345 | £99,727 | £351,137 |
| Mean value for group | £24,769 | £49,960 | £155,832 | £780,043 |
| Average income tax paid | £4,415 | £10,550 | £49,477 | £274,482 |
| Percentage of personal income tax revenue | 100% | 27.6% | 8.6% | 4.2% |
The top 0.1% are 90% male and 50% of these people are in the 45 to 54 year age group. 31% of these people live in London and 21% in South East England. 33% of these people are company directors (as reported to HMRC). 30% work in finance and 38% in general business (includes law). The very richest rely on earnings (salary and bonuses) for 58% of income. Income from self-employment (such as partnerships in law or accountancy firms) accounts for 23% of income and about 18% from investment income (interest and share dividends).
Sources of income
The Family Resources Survey is a document produced by the Department for Work and Pensions. This details income amongst a representative sample of the British population. The 2005-2006 report can be found here. This report tabulates sources of income as a percentage of total income.
| Region | Employment (salaries & wages) | Self employed | Investment income | Working tax credit | State pensions | Occupational pensions | Disability benefits | Other social security benefits | Other income sources |
|---|---|---|---|---|---|---|---|---|---|
| UK | 64% | 11% | 2% | 1% | 6% | 7% | 2% | 5% | 2% |
| Northern Ireland | 60% | 11% | 1% | 2% | 7% | 5% | 4% | 7% | 3% |
| Scotland | 66% | 7% | 2% | 2% | 7% | 7% | 3% | 5% | 2% |
| Wales | 60% | 8% | 2% | 2% | 8% | 8% | 4% | 6% | 1% |
| England | 64% | 11% | 2% | 1% | 6% | 7% | 2% | 5% | 2% |
| North East England | 64% | 5% | 2% | 2% | 8% | 6% | 4% | 7% | 2% |
| North West England | 59% | 13% | 2% | 2% | 7% | 7% | 3% | 6% | 2% |
| Yorkshire | 64% | 7% | 2% | 2% | 7% | 7% | 2% | 5% | 3% |
| East Midlands | 65% | 9% | 2% | 1% | 7% | 6% | 2% | 5% | 3% |
| West Midlands | 62% | 8% | 3% | 2% | 8% | 6% | 2% | 5% | 3% |
| Eastern England | 56% | 22% | 2% | 1% | 5% | 7% | 1% | 3% | 2% |
| London | 71% | 10% | 2% | 1% | 4% | 4% | 1% | 5% | 3% |
| South East | 66% | 9% | 4% | 1% | 7% | 8% | 1% | 4% | 2% |
| South West England | 60% | 9% | 4% | 1% | 7% | 10% | 2% | 4% | 2% |
Other social security benefits include: Housing Benefit, Income Support and Jobseeker's Allowance
See also
- Poverty in the United Kingdom
- Taxation in the United Kingdom
- Pension provision in the United Kingdom
References
- ^ Office for National Statistics (10, June 2010). Income inequality remains stable 2010 News release].
- ^ http://www.telegraph.co.uk/finance/recession/8819427/Millionaires-number-of-wealthy-Britons-rises-despite-recession.html>
- ^ http://www.guardian.co.uk/business/2004/jun/16/money
- ^ Office for National Statistics (2010). Annual Survey of Hours and Earnings, 2010 Statistical Bulletin.
- ^ http://www.guardian.co.uk/money/2002/jun/09/workandcareers.theobserver
- ^ http://www.guardian.co.uk/world/2003/mar/14/eu.society
- ^ http://www.epolitix.com/members/member-press/member-press-details/newsarticle/average-hourly-pay-in-81-out-of-204-uk-areas-below-90-of-uk-average-of-1250-per-hour///sites/gmb/
- ^ Prospect Magazine, Issue 178, January 2011 edition
- ^ http://www.guardian.co.uk/society/2010/oct/05/child-benefit-cuts
- ^ http://www.uswitch.com/news/money/uswitch-quality-of-life-index-uk-is-the-worst-place-to-live-in-europe-900002286/?ref=email_insight_uswitch_03oct11/
- ^ http://news.bbc.co.uk/1/hi/8151355.stm
- ^ http://blogs.channel4.com/factcheck/better-off-on-benefits-than-earning-15000-a-year/2841
- ^ http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tec00113&plugin=1
- ^ http://www.oecdbetterlifeindex.org/countries/united-kingdom/
- ^ http://www.guardian.co.uk/news/datablog/2011/nov/24/wages-britain-ashe-mapped
- ^ http://www.independent.co.uk/news/business/news/women-close-pay-gap-but-earnings-lose-ground-to-inflation-8344812.html
- ^ http://www.hmrc.gov.uk/statistics/tax-statistics/table2-4.pdf
- ^ http://www.bankofengland.co.uk/education/Pages/inflation/calculator/flash/default.aspx
- ^ http://www.investinmanchester.com/market-intelligence/economic-overview/economic-data/
- ^ HMRC Distribution among the adult population of marketable wealth (Series C) (Table 13.5)
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