Recent income trends and forecasts
Household incomes fell across the income distribution in 2023/24. Median
household income before housing costs was £650 a week in 2023/24, a real
fall of £13 a week (2%) since 2022/23.
Income for households with the lowest 10% of incomes fell the most, by £18 a
week (7%) from 2022/23 to £235 a week in 2023/24.
This fall is despite lower inflation, a stronger labour market and benefits
increases in April 2023. The Institute for Fiscal Studies says this decrease
seems to be due to lower net earnings but points out that the data may not be
reliable.
In March 2025, the Office for Budget Responsibility forecasted that real
household disposable income per person will rise modestly on average in
coming years.
Gini coefficients and income shares
The Gini coefficient for income inequality summarises income inequality into a
single number between 0 and 100%, where a higher percentage means more
unequal. The Gini coefficient was 35% before housing costs and 39% after
housing costs in 2023/24.
A couple without children with disposable income below £300 per week
before housing costs were lowest-income 10% of households in 2023/24. To
be in the highest-income 10% required an income four times higher, of at
least £1,260 per week.
In 2022/23, 36% of total disposable household income in the UK went to the
fifth of individuals with the highest household incomes, while 9% went to the
fifth with the lowest.
Commons Library Research Briefing, 12 April 2025
4
Income inequality in the UK
Income inequality in the long run
Inequality in household incomes in the UK has remained at a roughly similar
level since the early 1990s but is higher than during the 1960s and 1970s.
While the share of income going to the top 1% of individuals by household
income increased during the 1990s and 2000s, there was some reduction in
inequality among the rest of the population (based on incomes before
housing costs) with the result that inequality overall was fairly stable during
this period.
Income inequality between regions, ethnic
groups, and disability status
Historically, household income across the UK has varied significantly between
regions and countries, ethnic groups, and the disability status of households.
The West Midlands (£600) had the lowest median income before housing
costs in 2021/22 to 2023/24, while London (£767) had the highest. Households
from a Pakistani ethnic group (£441) had the lowest median incomes before
housing costs while households from an Indian ethnic group (£720) had the
highest. Families with a disabled member had a median income of £506
before housing costs during this period, compared to £629 for households
where nobody was disabled.
International comparisons
OECD figures suggest that the UK has among the highest levels of income
inequality in the European Union (as measured by the Gini coefficient),
although income inequality is slightly lower than in the United States.