Asked by: Michael Tomlinson (Conservative - Mid Dorset and North Poole)
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, how income inequality has changed by percentile since 2010.
Answered by Caroline Dinenage
The Households Below Average Income survey (HBAI) produces information on the income distribution and income inequality which can be found here. This publication shows income inequality has fallen between 2009/10 and 2015/16.
https://www.gov.uk/government/statistics/households-below-average-income-199495-to-201516
Table 2.1ts of this publication sets out median incomes over time for each decile of the population, ordered from the 10% of individuals with the lowest equivalised household incomes (decile 1), to the 10% of individuals with the highest incomes (decile 10). This shows between 2009/10 and 2015/16 on a Before Housing Cost (BHC) basis, the median income of decile 1 increased by 4%, whereas the median income of decile 10 decreased by 3%. The patterns were similar on an After Housing Cost (AHC) basis, whereby decile 1 increased by 2% and decile 10 decreased by 3%.
The publication also has measures for income inequality. One of these is the Gini-coefficient, which is an international standard technical measure, showing how incomes are distributed across all individuals. It ranges from 0% (when everyone has identical incomes) to 100% (when all income goes to only one person). Income inequality according to this measure has fallen between 2009/10 and 2015/16 from 36% to 35% on a BHC basis, and from 40% to 39% on an AHC basis.
Another measure of income inequality is the 90/10 ratio; this compares the incomes of the 90th percentile to the 10th percentile. The higher the number, the greater the gap between those with the highest incomes and those with the lowest incomes. This measure has fallen between 2009/10 and 2015/16 from 4.1 to 3.9 on a BHC basis, and from 5.4 to 5.2 on an AHC basis.