Richest fifth in the UK worse off since financial crash, official figures reveal

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The richest fifth of the population are worse off now than they were before the financial crash, but the poorest fifth have typically become better off, according to official figures which could spark controversy among anti-austerity campaigners.

The data from the Office for National Statistics also reveals a young/old split, with the average incomes of retired households now higher than they were in 2007-08, in stark contrast to younger households.

According to the ONS, the economic downturn “had a negative impact on the incomes of all but the poorest fifth of the population”. It said the least well-off 20% of households were the only group whose average income did not fall between 2007-08 and 2012-13. In 2014-15 the average income of this group was £700 (5.8%) above its 2007-08 level.

By contrast, the average disposable income of the richest fifth of households fell the most following the downturn: by 7.9% between 2007-08 and 2012-13. Since then it has increased but remains £2,000 below its previous peak. This has largely been blamed on a fall in average income from employment.

The ONS said the increase for the poorest fifth was mainly due to an increase in average levels of pay for this group, along with higher benefit payments such as tax credits and jobseeker’s allowance.

The figures are likely to spark controversy among inequality campaigners, and are at odds with other data that shows wealth in the UK concentrating in fewer and fewer hands.

A report from Credit Suisse found the top 10% of the British population have seen their share of total wealth in the UK rise from 52% to 54% since the financial crash.

A separate report from the Institute of Fiscal Studies last year laid bare the extent of inequality in Britain, finding that 9% of households have no assets, while 5% are worth in excess of £1.2m.

But the ONS said more recently incomes have generally begun to recover. Between 2012-13 and 2014-15, average incomes increased for all groups, with the middle fifth of the population seeing the biggest increase: £1,500 in real terms (or 6.4%), reversing the fall following the economic crisis.

The average incomes of retired households were “largely unaffected” by the downturn – in fact, the typical figure grew by £1,500 (or 7.7%) between 2007-08 and 2014-15 to reach £21,000.

However, the average figure for non-retired households fell over this period, and was £2,600 lower in 2012-13 than in 2007-08. Since then, the typical figure has risen to £28,300 – but this is still around £900 below the 2007-08 level of £29,200.

Powered by article was written by Rupert Jones, for on Tuesday 23rd February 2016 12.45 Europe/ © Guardian News and Media Limited 2010


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