UK inequality narrows, but the average worker is still worse off
Household incomes in the UK rose by £600 in 2016, narrowing the gap between the rich and the poor, according to the Office for National Statistics (ONS).
The average income level was £26,300, £1,000 higher than the pre-downturn value of £25,400 in 2007/8.
The average disposable income for the poorest fifth of the population rose by £700 between 2014/15 and 2015/16. Conversely the richest segment of households experienced a fall in income by £1,000 over the same period.
This gradual decline in income equality has been occurring over the last 10 years with levels being similar to those seen in the mid to late 1980s.
There was however a growing “generational divide” as the main driver of rising spending power was higher state and private pension payments.
Retired households enjoyed a boost with median incomes rising by 3.1% to £21,770 during the time period while typical working age households saw their incomes remain broadly unchanged.
Non-retired households still have a median income that is 1.2% lower than pre-crisis levels in 2007/8.
Head of Household Income and Expenditure Analysis, Claudia Wells, said: “Household incomes are above their pre-downturn peak overall, but not everyone is better off. While retired households’ incomes have soared in recent years, non-retired households still have less money, on average, than before the crash.”