Income in the United Kingdom

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The United Kingdom is a wealthy country in world terms, with virtually no people living on less than US $2 a day. There were over 425,000 net worth Sterling Millionaires in Britain in 2005 (source), and 383,000 Dollar Millionaires (financial assets only) in 2004 (source). There is however significant income inequality with Britain having a Gini coefficient of 36. The main sources for the statistics below are Her Majesty's Revenue and Customs (HMRC) and the Institute for Fiscal Studies (IFS)

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[edit] Taxable Income

Data from HMRC 2004-2005; incomes are before tax for individuals. The personal allowance or income tax threshold was £4745 (people with incomes below this level do not pay tax). The Mean income was £22,800 per year with the average Briton paying £4060 in tax.

range number of taxpayers (thousands)
£4745 to £6000 1,440
£6000 to £7000 1,160
£7000 to £8000 1,590
£8000 to 10,000 2,950
£10,000 to £12,000 2,760
£12,000 to £15,000 3,650
£15,000 to £20,000 4,950
£20,000 to £30,000 6,000
£30,000 to £50,000 4,090
£50,000 to £70,000 859
£70,000 to £100,000 410
£100,000 to £200,000 300
£200,000 to £500,000 89
£500,000 to £1Million 16
Over £1Million 6

[edit] Percentile Points for taxed income of individuals

source – for tax year 2004-2005

Percentile point Income
Bottom 1% £4,980
5% £6,070
10% £7,260
25% £10,300
Median (50%) £16,400
75% £26,100
Top 10% (90 %) £39,000
95 % £52,400
Top 1% £117,000

[edit] Income Distribution Across Age Bands

Source

Age Band Median Income Mean Income Median Income (Men) Mean Income (Men) Median Income (Women) 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 to 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

[edit] Income distribution across UK regions

Source

UK Region Mean Income  % earning over £ 50,000  % of households receiving income related benefits
North East England £19,127 2.78 % 31 %
North West England £ 20,483 3.99 % 27%
Yorkshire £20,247 3.83 % 24%
East Midlands £20,868 4.34 % 21 %
West Midlands £20,530 3.94% 25%
East of England £24,401 6.83% 20%
London £29,947 9.49% 24%
South East England £26,328 8.50% 16%
South West England £20,954 4.47% 19%
Wales £19,007 3.05% 24%
Scotland £20,895 4.32% 26%
Northern Ireland £19,705 3.22% 26%

[edit] Income Distribution by Job Type

Source is 2007 Annual Survey of Hours and Earnings (ASHE) link found here

Job Group (Socio Economic) Median Earnings (£/year) Mean Earnings (£/year) 90th Percentile (top ten) Earnings
All Employees 19,943 24,908 42,902
Managers and Executives 34,000 47,082 78,072
Professionals (e.g Doctors, Lawyers etc) 32,176 34,932 54,941
Associate professional and technical (e.g Nurses, Police) 24,999 27,245 41,313
Administrative & secretatrial 15,452 16,135 26,205
Skilled trades (e.g builders, carpenters, plumbers etc) 21,871 22,607 34,835
Personal service Jobs (e.g Hairdressing, Care Assistant) 11,461 12,226 20,370
Sales 9,093 10,512 19,072
Semi skilled operators 19,972 20,710 31,615
Elementary Jobs 11,703 12,292 22,850

[edit] 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

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%

[edit] Wealth

The net worth information is based on data from the HMRC for 2004-2005 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 & 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

[edit] The "Very,Very Rich"

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 tax payers. (the remainder are pensioners, students, homemakers, unemployed and 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 % (or the "very,very rich)
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 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).

[edit] Sources of Income

The Family Resources Survey is a document produced by the Department of 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

[edit] See also

[edit] References

  • HMRC statistics - [1]
  • IFS - [2]