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] 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.

Contents

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 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 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.

rangenumber of taxpayers
£4745 to £60001,440,000
£6000 to £70001,160,000
£7000 to £80001,590,000
£8000 to £10,0002,950,000
£10,000 to £12,0002,760,000
£12,000 to £15,0003,650,000
£15,000 to £20,0004,950,000
£20,000 to £30,0006,000,000
£30,000 to £50,0004,090,000
£50,000 to £70,000859,000
£70,000 to £100,000410,000
£100,000 to £200,000300,000
£200,000 to £500,00089,000
£500,000 to £1 million16,000
Over £1 million6,000

Percentile points for income of individuals before tax

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

Percentile point1%5%10%25%50%75%90%95%99%Mean
Income 1999-00£4,600£5,630£6,570£9,260£14,400£22,300£33,000£44,600£96,400£19,600
Income 2000-01£4,620£5,520£6,480£9,280£14,800£23,000£34,200£46,700£102,000£20,300
Income 2001-02£4,780£5,850£6,860£9,910£15,500£24,300£36,200£49,200£107,000£21,400
Income 2002-03£4,860£5,960£6,970£10,000£15,800£24,700£36,700£49,800£108,000£21,600
Income 2003-04£4,820£5,850£7,000£10,100£16,000£25,100£37,100£50,600£111,000£21,900
Income 2004-05£4,980£6,070£7,260£10,300£16,400£26,100£39,000£52,400£117,000£22,800
Income 2005-06£5,200£6,350£7,610£10,800£17,100£27,400£41,300£56,200£132,000£24,300
Income 2006-07£5,410£6,600£7,880£11,200£17,700£28,400£42,900£58,500£141,000£25,500
Income 2007-08£5,600£6,870£8,240£11,800£18,500£29,500£44,900£61,500£149,000£26,800
Income 2009-10£6,800£7,970£9,510£12,900£19,600£30,900£46,600£63,200£149,000£28,400
Income 2010-11£6,800£7,990£9,530£13,000£19,600£31,000£46,700£63,400£147,000£27,400
Income 2011-12£7,800£9,030£10,410£13,800£20,600£32,200£48,600£66,100£153,000£29,000
Income 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.[17]

1 Age Band2 Median Income3 Mean Income4 Median Income (Men)5 Mean Income (Men)6 Median Income (Women)7 Mean Income (Women)
Under 20 years£ 8,130£ 9,570£ 8,490£ 9,810£ 7,990£ 9,250
20 – 24 years£ 11,800£ 13,200£ 12,400£ 13,800£ 11,200£ 12,300
25 – 29 years£ 17,000£ 19,300£ 17,800£ 20,600£ 15,900£ 17,800
30 – 34 years£ 19,500£ 23,900£ 21,600£ 26,700£ 16,400£ 20,100
35 – 39 years£ 20,100£ 26,800£ 23,600£ 31,700£ 15,500£ 20,100
40 – 44 years£ 20,200£ 28,100£ 24,600£ 34,600£ 14,900£ 19,800
45 – 49 years£ 20,300£ 28,600£ 24,800£ 35,400£ 15,200£ 20,100
50 – 54 years£ 19,300£ 27,000£ 23,500£ 33,400£ 15,100£ 19,200
55 – 59 years£ 17,200£ 24,500£ 20,900£ 29,900£ 13,100£ 17,200
60 – 64 years£ 13,600£ 20,000£ 16,500£ 24,300£ 10,700£ 14,200
65 – 69 years£ 12,600£ 17,900£ 13,600£ 19,500£ 11,100£ 14,800
70 – 74 years£ 13,300£ 18,100£ 15,600£ 21,100£ 10,700£ 14,300
Over 75 years£ 12,400£ 16,700£ 15,300£ 19,900£ 10,400£ 14,100

Income distribution across UK regions

Office for National Statistic 2007 [2]
UK RegionGross 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.

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

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 incomePercentile point
£5,0003%
£10,00010%
£15,00031%
£20,00050%
£25,00066%
£30,00077%
£35,00085%
£40,00090%
£45,00093%
£50,00095%
£60,00097%
£75,00099%

Wealth

The net worth information is based on data from the HMRC for 2004–2005[18] and includes marketable assets including house equity, cash, shares, bonds and investment trusts. These values do not include personal possessions.

Percentile pointWealth to qualifyPercentage of total wealth owned by people at and above this level
Top 1%£688,22821% of total UK wealth
2%£460,17928% of total UK wealth
5%£270,16440% of total UK wealth
10%£176,22153% of total UK wealth
25%£76,09872% of total UK wealth
50%£35,80793% 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 taxpayersTop 10% to 1% (adults)Top 1% to 0.1% (adults)Top 0.1% (adults)
Number29.5 Million4.21 Million421,00042,000
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 revenue100%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.

RegionEmployment (Salaries & Wages)Self EmployedInvestment IncomeWorking tax creditState PensionsOccupational PensionsDisability BenefitsOther Social Security BenefitsOther Income Sources
UK64%11%2%1%6%7%2%5%2%
Northern Ireland60%11%1%2%7%5%4%7%3%
Scotland66%7%2%2%7%7%3%5%2%
Wales60%8%2%2%8%8%4%6%1%
England64%11%2%1%6%7%2%5%2%
North East England64%5%2%2%8%6%4%7%2%
North West England59%13%2%2%7%7%3%6%2%
Yorkshire64%7%2%2%7%7%2%5%3%
East Midlands65%9%2%1%7%6%2%5%3%
West Midlands62%8%3%2%8%6%2%5%3%
Eastern England56%22%2%1%5%7%1%3%2%
London71%10%2%1%4%4%1%5%3%
South East66%9%4%1%7%8%1%4%2%
South West England60%9%4%1%7%10%2%4%2%

Other Social Security benefits include: Housing Benefit, Income Support and Jobseeker's Allowance

See also

References

  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. ^ http://www.guardian.co.uk/business/2004/jun/16/money
  4. ^ Office for National Statistics (2010). Annual Survey of Hours and Earnings, 2010 Statistical Bulletin.
  5. ^ http://www.guardian.co.uk/money/2002/jun/09/workandcareers.theobserver
  6. ^ http://www.guardian.co.uk/world/2003/mar/14/eu.society
  7. ^ 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/
  8. ^ Prospect Magazine, Issue 178, January 2011 edition
  9. ^ http://www.guardian.co.uk/society/2010/oct/05/child-benefit-cuts
  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. ^ http://news.bbc.co.uk/1/hi/8151355.stm
  12. ^ http://blogs.channel4.com/factcheck/better-off-on-benefits-than-earning-15000-a-year/2841
  13. ^ http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&language=en&pcode=tec00113&plugin=1
  14. ^ http://www.oecdbetterlifeindex.org/countries/united-kingdom/
  15. ^ http://www.guardian.co.uk/news/datablog/2011/nov/24/wages-britain-ashe-mapped
  16. ^ http://www.independent.co.uk/news/business/news/women-close-pay-gap-but-earnings-lose-ground-to-inflation-8344812.html
  17. ^ http://www.bankofengland.co.uk/education/Pages/inflation/calculator/flash/default.aspx
  18. ^ HMRC Distribution among the adult population of marketable wealth (Series C) (Table 13.5)