Incomes and inequality

Over the past decade, growth in household incomes has been extremely weak. In 2015-16, average (median) income was less than 5% above its pre-recession (2007-08) level - and once you exclude pensioners the picture is even worse. Meanwhile income inequality remains lower than on the eve of the financial crisis, and around the same level as in 1990. Looking forward, a combination of falling real earnings growth, the flattening off of employment growth, and planned cuts to benefits means growth in household incomes is likely to continue to be weak. In the run-up to the 2017 general election we will draw together our findings on incomes and inequality into a pre-election briefing, and analyse the likely impact of manifesto commitments on incomes and inequality.

Real median income, 1961 to 2021-22

 Source: Figure 3.1B, Living standards, poverty and inequality in the UK: 2016–17 to 2021–22, 22 March 2017.

IFS election 2017 publications

Briefing Notes

Stuart Adam, Andrew Hood, Robert Joyce and David Phillips, Labour’s proposed income tax rises for high-income individuals, 16 May 2017

Jonathan Cribb, Robert Joyce, Agnes Norris Keiller, Minimum wages in the next parliament, 11 May 2017

Andrew Hood and Tom Waters, Incomes and inequality: the last decade and the next parliament, 5 May 2017

Andrew Hood and Tom Waters, The impact of tax and benefit reforms on household incomes, 27 April 2017

Observations

Paul Johnson, Robert Joyce and Tom Waters, If politicians talk about the rich, always ask who they mean, 5 May 2017

Andrew Hood, A 'double lock' on the state pension would still be a bad idea, 27 April 2017

Videos

Andrew Hood, What’s happening to living standards, inequality, and poverty in the UK?, 2 Mar 2017

Robert Joyce, Fifty years of income inequality, May 2017