Income in the United Kingdom

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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 £15,000 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] The main sources for statistics on UK income are HM Revenue and Customs (HMRC) and the Office for National Statistics.

Taxable income[edit]

April 2010 median gross weekly earnings for full-time employees were £499.[3]

According to OECD statistics after tax, the average British family in 2009 was left with an average of 26,904 USD in disposable income, compared with 28,310 USD for the average French family, 28,799 USD for the average German family, 22,847 USD for the average Spanish family, and 24,216 USD for the average Italian family.[4] This represents a significant fall in the UK’s position when compared to 2002.[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 annum[9] 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 £21,919.[13] In 2011, the average household net-adjusted disposable income was 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]

In the European Union in 2006, the highest gross hourly wage was recorded in Denmark, with 22.38 Euros, followed by Ireland and the United Kingdom where average earnings were respectively 20.83 Euros and 19.47 Euros per hour.[17]

In 2009, 20.6% of full-time employees were estimated to be low-paid, defined by the OECD as earning less than two-thirds of the national gross median hourly full-time wage.[18]

According to an annual survey from 2012, the UK standard of living in 2011 was 18% higher than the European average.[19]

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[edit]

For tax years 1999-00 to 2012–13 except 2008–09.[20]

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 (Projected) £7,800 £9,030 £10,410 £13,800 £20,600 £32,200 £48,600 £66,100 £153,000 £29,000
2012–13 (Projected) £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 2004-5[edit]

Source for tax year 2004–05. To estimate for 2010–11, increase by 22% to allow for inflation.[21]

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 2007[edit]

Office for National Statistic 2007[22]
UK region Gross income
London £27,868
South East England £21,109
Northern Ireland £19,603
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[edit]

Median earnings between different job types in 2010 can be seen here.

Income by profession.jpg

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[edit]

Effects of tax and benefits on household income in the UK 2011 - 2012.png

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.

British post tax household annual income in GBP

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[edit]

The net worth information is based on data from the HMRC for 2004–2005[23] 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[edit]

The Institute for Fiscal Studies issued a report on Britain's highest earners in January 2008. The report is available here [2]. 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 national personal income 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[edit]

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 [3]. 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[edit]

References[edit]

  1. ^ Office for National Statistics (10, June 2010). Income inequality remains stable 2010 News release].
  2. ^ http://www.telegraph.co.uk/finance/recession/8819427/Millionaires-number-of-wealthy-Britons-rises-despite-recession.html>
  3. ^ Office for National Statistics (2010). Annual Survey of Hours and Earnings, 2010 Statistical Bulletin.
  4. ^ "OECD Better Life Index". OECD Better Life Index. Retrieved 2013-12-30. 
  5. ^ Jill Insley (2002-06-10). "The mugs of Europe | Money". London: The Observer. Retrieved 2013-12-30. 
  6. ^ Polly Toynbee (2003-03-14). "Comment: Poverty of ambition | World news". London: The Guardian. Retrieved 2013-12-30. 
  7. ^ "Average Hourly Pay In 81 Out of 204 UK Areas Below 90% Of UK Average Of £12.50 Per Hour". ePolitix.com. 2006-01-10. Retrieved 2013-12-30. 
  8. ^ Prospect Magazine, Issue 178, January 2011 edition
  9. ^ Patrick Collinson and Mark King (2010-10-05). "How benefit cuts could affect you | Politics". London: The Guardian. Retrieved 2013-12-30. 
  10. ^ 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/
  11. ^ Rohrer, Finlo (2009-07-15). "UK | Magazine | Just what is a big salary?". BBC News. Retrieved 2013-12-30. 
  12. ^ Newman, Cathy (2010-05-27). "Better off on benefits than earning £15,000 a year?". Channel 4 – The FactCheck Blog. Retrieved 2013-12-30. 
  13. ^ "Eurostat – Tables, Graphs and Maps Interface (TGM) table". Epp.eurostat.ec.europa.eu. 2013-10-17. Retrieved 2013-12-30. 
  14. ^ "OECD Better Life Index". OECD Better Life Index. Retrieved 2013-12-30. 
  15. ^ Ball, James (2011-11-24). "Wages throughout the country: how does your area compare? | News". London: theguardian.com. Retrieved 2013-12-30. 
  16. ^ Russell Lynch (2012-11-22). "Women close pay gap but earnings lose ground to inflation – Business News – Business". London: The Independent. Retrieved 2013-12-30. 
  17. ^ http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-10-003/EN/KS-SF-10-003-EN.PDF
  18. ^ http://www.resolutionfoundation.org/media/media/downloads/Beyond_the_Bottom_Line_-_FINAL.pdf
  19. ^ Ed Monk (2012-12-13). "UK standard of living slides against EU rivals – Britain slips to sixth in table of nations". This is Money. Retrieved 2013-12-30. 
  20. ^ http://www.hmrc.gov.uk/statistics/tax-statistics/table2-4.pdf
  21. ^ "Education and Museum | Inflation Calculator". Bank of England. Retrieved 2013-12-30. 
  22. ^ [1][dead link]
  23. ^ HMRC Distribution among the adult population of marketable wealth (Series C) (Table 13.5)
  • HMRC statistics – [4]
  • IFS – [5]