Because more equal societies work better for everyone

The scale of economic inequality in the UK

UK income inequality

The UK has a very high level of income inequality compared to other developed countries.

People in the bottom 10% of the population have on average a net income of £8,628. The top 10% have net incomes almost ten times that (£80,240). As can be seen from the graph, income inequality is much starker at the top of the income scale, with the group with the 9th highest incomes making only 60% of the top 10%’s income. Inequality is much higher amongst original income than net income with the poorest 10% having on average an original income of £3,875 whilst the top 10% have an original income over 27 times larger (£104,940)1.

 [2]

 

Differences within the top 1%

The graph above does not show the full extent of the difference between the richest and the rest of society.  This is because the top 1% have incomes substantially higher than the rest of those in the top 10%. In 2011, the top 1% had an average income of £248,480 and the top 0.1% had an average income of £922,4333.

How income is shared

The poorest fifth of society have only 8% of the total income, whereas the top fifth have just less than half (41%).

The graph below shows how income is shared amongst households. The poorest fifth of society have only 8% of the total income, whereas the top fifth have just less than half (41%).

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Income spread between the UK’s regions and nations

Income is also spread unequally across the UK’s regions and nations. The average household income in London is considerably higher than in the North East.

[5]

 

UK wealth inequality

The richest 10% of households hold 44% of all wealth.  The poorest 50% own just 9.5%. 

Wealth in the UK is even more unequally divided than income.  The richest 10% of households hold 44% of all wealth.  The poorest 50%, by contrast, own just 9.5%.  The bottom 10% of the population have less than £12,500 in total wealth, whilst the top 9% have £1,000,000 or more in wealth 6

[6]

 

Wealth spread between the UK’s regions and nations

Wealth is also unevenly spread across the UK. An average household in the South East has almost twice (182.63%) the amount of wealth of an average household in Scotland7.

[7]

 

How does the UK compare to other countries?

Wealth

Compared to the other OECD countries the UK has a relatively equal distribution of wealth. The UK has a wealth GINI coefficient of 0.675 compared to an OECD average of 0.717.

[8]

 

Income

Out of the 30 OECD countries in the LIS data set, the UK is the fourth most unequal.

Compared to other developed countries the UK has a very unequal distribution of income.  Out of the 30 OECD countries in the LIS data set, the UK is the fourth most unequal, and within this data set it is the most unequal in Europe9. 




[1] Mean income of individuals 2013 net ONS 

[2] Mean income of individuals 2013 ONS  

[4] Household, 2011/12, Net income HBAI

[5] Mean income of individuals 2013 ONS

[6] Household,2010-2012 ONS 

[7] Household, 2010-2012 ONS 

[8] Gini, 2012 Credit Suisse

[9] Luxembourg Income Study

What is the scale of inequality in the UK and how does the UK compare internationally?
The UK has the 7th most unequal split of incomes out of 34 countries in the developed world but are relatively equal in terms of wealth. While the top fifth have 42% of the country’s income and 60% of the country’s wealth, the bottom fifth have only 8% of the income and only 1% of the wealth.