Shares of total household income by quintile group
There were substantial changes to the UK income distribution in the period between 1977 and 1991, while in contrast, 1992 to 2006/07 was a period of relative stability.
During the 1980s, there was an increase in income inequality caused by greater inequality in the distribution of income from wages and salaries. Between 1977 and 1991, the share of total disposable income received by the top fifth of households increased from 36 to 42 per cent. The shares received by each of the lower three quintile groups fell, in the case of the bottom quintile group from 10 to 7 per cent.
In comparison, the changes which took place between 1992 and 2006/07 were much smaller, with relatively little overall change in the income shares of each quintile group over this period. Income inequality narrowed slightly in the early 1990s, widening again in the late 1990s. It narrowed again between 2001/02 and 2004/05, only to widen once more between 2004/05 and 2006/07.
One of the largest changes in the composition of the income distribution over the last thirty years was in the position of retired households. In 1977, the majority of retired households were in the bottom quintile group (51 per cent). By 1996/97, this proportion had fallen to 29 per cent, and it remained at a similar level between 1996/97 and 2006/07.
The proportion of children living in households in the bottom quintile group increased from 19 to 29 per cent between 1977 and 1996/97. This was mainly due to an increase in the number of one adult households with children. In 2006/07 the proportion of children living in households in the bottom quintile group was 25 per cent.
Source: Office for National Statistics
Notes: Households are ranked by equivalised disposable income.
Equivalisation is a standard methodology which is used to adjust incomes in order to take account of the demand on resources of households of differing size and composition.
Disposable income consists of income from employment and self-employment, pensions, investment income and cash benefits less income tax, council tax (or Northern Ireland rates) and employees' national insurance contributions.
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Article: The distribution of household income 1977 to 2006/07