Income in the United Kingdom

In terms of global poverty criteria, the United Kingdom is a wealthy country, with virtually no people living on less than £10 a day. In 2012-13, median income was approximately £21,000 a year but varies considerably by age, location, data source and occupation. There is both significant income redistribution and income inequality; for instance, in 2013/14 income in the top and bottom fifth of households was £80,800 and £5,500, respectively, before taxes and benefits (15:1). After tax and benefits, household income disparities are significantly reduced to £60,000 and £15,500 (4:1).

The UK Gini coefficient for 2013/14 estimated at 0.34. There were 720,000 net worth Sterling millionaires in the United Kingdom in 2015 (1 in 65 adults).

There are a number of different sources of data on income which results in different estimates of income due to different sample sizes, population types (e.g. whether the population sample includes the self-employed, pensioners, individuals not liable to tax), definitions of income (e.g. gross earnings vs original income vs gross income vs net income vs post tax income).

The Survey of Personal Incomes (SPI) is a dataset from HM Revenue and Customs (HMRC) based on individuals who could be liable to tax. HMRC does not hold information on individuals whose income is below the personal allowance (£8,105 in 2012/13). Furthermore, SPI does not include income from non taxable benefits such as housing benefits or job seekers allowance.

The Annual Survey of Hours and Earnings (ASHE) is a dataset from an annual survey of approximately 50,000 businesses by the Office for National Statistics (ONS) and covers annual earnings, public and private sector pay differential and the gender pay gap. ASHE does not cover individuals who are self-employed.

The Households Below Average Income (HBAI) dataset is based on the Family Resources Survey (FRS) from the Department for Work and Pensions (DWP). It includes information on equalised household disposable income and can be used to represent the distribution of household income and income inequality (Gini coefficient).

Other data sources include Average Weekly Earnings, Labour Force Survey, Index of Labour Cost per Hour, Unit Labour Costs, Effects of Taxes and Benefits on Household Income / Living Costs and Food Survey, European Union Statistics on Income and Living Conditions, Pensioners Income Series, Wealth and Assets Survey, National Accounts Estimates of Gross Disposable Household Income, and Small Area Income Estimates.

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