Income distribution

Department:
Department for Work and Pensions
Published:
Last updated:
, see all updates
Source:
Households Below Average Income: 1994/95 to 2016/17
Area covered:
United Kingdom
Time period:
2008/09 to 2016/17

The main facts and figures show that:

  • UK households were divided into 5 equally-sized groups, or ‘quintiles’, based on their income – the average household income ranged from £9,100 in the lowest quintile to £45,900 in the highest quintile (after housing costs were deducted)
  • over half of households from the Asian, Black and Other ethnic groups fell into the 2 lowest income quintiles (after housing costs were deducted)
  • 42% of White British households fell into the 2 highest income quintiles (after housing costs were deducted), the highest percentage out of all ethnic groups
  • 20% of Black households fell into the 2 highest income quintiles (after housing costs were deducted), the lowest percentages out of all ethnic groups
Things you need to know

Households are grouped according to the ethnicity of the member of the household with the highest income. Because households may also contain members of other ethnic groups, this data does not reflect the distribution of household income by an individual’s ethnicity.

This data comes from the Family Resources Survey (FRS), which is used to calculate the Households Below Average Income (HBAI) statistics. The FRS is a ‘sample survey’. It collects information from a random sample of the population to make generalisations (reach 'findings') about the total population.

Keep in mind that all survey estimates are based on a sample of the population, rather than the whole population. This means there’s a degree of uncertainty which is greater when the number of respondents is small. There are usually fewer respondents from ethnic minority groups due to the make-up of the general population – therefore, the level of uncertainty is higher for these groups.

Results taken from a low number of respondents are more likely to be affected by statistical variation, so observed changes might not reflect real differences. As such, caution is needed when interpreting differences between ethnic groups.

To increase the reliability of the data, the Department for Work and Pensions (DWP) combines data for each year into a 3-year average. This process continues over a series of overlapping 3-year periods.

This type of survey methodology means that some statistical tests for significant differences between ethnic groups have not been carried out. However, commentary has been supplied for those findings where differences between ethnic groups are reasonably reliable.

What the data measures

This data measures how income is spread across UK households, broken down by ethnicity. It divides households into 5 equally-sized groups (called ‘quintiles’) according to whether their income is at the bottom of the scale, the second lowest, the middle, the second highest, or at the highest end of the scale.

By dividing UK households into these 5 quintiles, it’s possible to see where people from different ethnic groups fall on the scale. An equal income distribution between all ethnic groups would mean that exactly 20% of each ethnic group population would fall within each of the 5 income quintiles.

Some ethnic groups are disproportionately represented within some income quintiles, which shows an unequal income distribution between ethnicities.

Households are grouped according to the ethnicity of the member of the household with the highest income. Income is measured as total weekly household income from all sources after tax, national insurance and other deductions have been paid.

Data is presented based on household income both before housing costs and after housing costs.

Measuring income before and after housing costs show how the cost of housing has a greater or lesser impact on different groups.

Working age families that spend a large proportion of their income on housing costs may move from a higher quintile before housing costs to a lower quintile after housing costs. People who spend a smaller proportion of their income on housing costs are less likely to move from a higher to a lower quintile after housing costs.

In 2016/17, the average UK household income after housing costs was:

  • top quintile: £45,900
  • second highest quintile: £29,800
  • middle quintile: £22,200
  • second lowest quintile: £15,600
  • bottom quintile: £9,100

In a household headed by a single person, income will go further than in a household containing adults and children. For this reason, household incomes are adjusted (or ‘equivalised’) during the statistical calculation to take into account the number of adults and children who live there.

The ethnic categories used in this data

For this data, the number of people surveyed (the ‘sample size’) was too small to draw any firm conclusions about specific ethnic categories. Therefore, the data is presented using the Office for National Statistics’ 2011 ‘5+1’ classification of broad ethnic groups:

  • Asian
  • Black
  • Mixed
  • White
  • Other

In addition, the White group is broken down into 2 ethnic groups:

  • White British
  • White Other

Ethnic groups and how data on ethnicity is collected

Income distribution before housing costs in each ethnic group

Location:
United Kingdom
Time period:
2014/15, 2015/16 and 2016/17 (combined)
Source:
Households Below Average Income: 1994/95 to 2016/17

Download chart (PNG)

Percentage of households in each income quintile (before housing costs) within each ethnic group

Ethnicity Bottom quintile (lowest income) Second lowest quintile Middle quintile Second highest quintile Top quintile (highest income)
% % % % %
Asian 32 21 17 15 15
Black 29 26 21 16 8
Mixed 24 17 21 19 19
White 19 20 20 21 21
White British 18 20 20 21 21
White other 20 18 17 20 25
Other 28 23 16 16 17

Download table data (CSV) Source data (CSV)

Summary

This data shows that:

  • 32% of Asian households were in the lowest income quintile (before housing costs), followed by 29% of Black households, 28% of households from the Other ethnic group, 24% of Mixed households, and 19% of White households
  • the Black ethnic group had the smallest percentage of households in the highest income quintile (at 8%), while the Other White group had the largest percentage (at 25%)
  • the Black ethnic group had the largest percentage of households in the lowest 2 income quintiles (at 55%), while the White British and Other White ethnic groups had the smallest percentages (at 38%)
  • there were more than twice as many Asian households in the lowest income quintile (32%) as in the highest income quintile (15%)

Income distribution after housing costs in each ethnic group

Location:
United Kingdom
Time period:
2014/15, 2015/16 and 2016/17 (combined)
Source:
Households Below Average Income: 1994/95 to 2016/17

Download chart (PNG)

Percentage of households in each income quintile (after housing costs) within each ethnic group

Ethnicity Bottom quintile (lowest income) Second lowest quintile Middle quintile Second highest quintile Top quintile (highest income)
% % % % %
Asian 33 25 17 13 13
Black 40 22 18 13 7
Mixed 29 16 24 15 16
White 18 20 20 21 21
White British 17 20 21 21 21
White other 26 19 17 17 20
Other 42 19 12 12 15

Download table data (CSV) Source data (CSV)

Summary

This data shows that, after housing costs were deducted:

  • White households had the largest percentage of households in the highest income quintile (21%); they also had the smallest percentage of households in the lowest income quintile (18%)
  • Black households had the smallest percentage of households in the highest income quintile (7%)
  • the Other ethnic group had the largest percentage of households in the lowest income quintile (42%)
  • the ethnic groups with the largest percentage of households in the two lowest quintiles were the Black (62%), Other (61%) and Asian (58%) ethnic groups; in comparison, 37% of White British households fell into the two lowest income quintiles

Methodology

Methodology

The data for this measure comes from the Family Resources Survey (FRS), which is used to calculate the Households Below Average Income (HBAI) statistics.

The FRS is a continuous household survey which collects information on a representative sample of private households in the UK. Detailed information is recorded on respondents’ income.

Household income (before housing costs) is taken from all sources of all household members, including dependants. Main income sources include:

  • gross income from employment, or profits from self-employment (after deductions like income tax, National Insurance, student loan repayments, and contributions to workplace, stakeholder and personal pension schemes)
  • benefits and tax credits
  • occupational and private pensions
  • investments
  • maintenance payments
  • educational grants, scholarships, student loans and parental contributions

Certain forms of income in kind are also counted – for example, free school meals, breakfast or milk, and free TV licences for pensioners aged 75 years and over.

Total household income is calculated after deducting council tax, maintenance and child support payments (which are deducted from the income of the person making the payment), and parental contributions to students living away from home.

Income after housing costs is calculated by deducting the following from the household’s total income:

  • rent (gross of housing benefit)
  • water rates, community water charges and council water charges
  • mortgage interest payments
  • structural insurance premiums (for owner occupiers)
  • ground rent
  • service charges

The survey is conducted in respondents’ homes face to face with an interviewer.

In the latest 3-year period, 2014/15 to 2016/17, the FRS sample consisted of almost 60,000 households in the UK. It has a financial year survey period with surveys conducted throughout the year and is cross-sectional (a ‘snapshot’ of households over the year). Individuals are not followed up for later surveys.

The ‘head of the household’, or ‘household reference person’ is classified as the householder with the highest income.

Households where every resident over the age of 16 responds to the questions are classed as fully co-operating. Only households with full co-operation are included in the analysis. This may introduce some error, as the characteristics of individuals living in households which do not respond fully may be different to those who do fully co-operate. Therefore, the sample will be more representative of those who do respond fully. Overall, 54% of households fully co-operated with the survey, meaning there was a sample size of 19,387 households in 2016/17.

Also, the FRS only covers private households, so individuals who live in communal accommodation (for example, care homes) or have no fixed address (for example, who are homeless) are not included in this data.

Estimates are subject to sampling error and non-sampling bias.

As the data is presented as a 3-year average, no statistical tests have been performed to determine whether the estimates taken from the survey are statistically significantly different from one another.

In other words, as the results are based on a sample of the population, without further testing it isn’t possible to determine whether any differences observed would likely be seen across the entire population. This is important to consider and means that conclusions around differences between groups cannot be drawn. However, the data is still useful because it indicates where differences between ethnic groups might exist.

The value for income has been ‘equivalised’ to ensure results can be compared. Equivalisation adjusts incomes for household size and composition, taking an adult couple with no children as the reference point. For example, the process of equivalisation would adjust the income of a single person upwards, so their income can be compared directly to the standard of living for a couple.

Weighting is used to adjust the results of a survey to make them representative of the population and improve their accuracy.

Suppression rules and disclosure control

Any values based on fewer than 100 responses have been suppressed.

Rounding

Values are given to the nearest whole percentage. Due to this rounding, some figures may not add up to 100.

Related publications

Households below average income (HBAI) statistics

Quality and methodology information

Data sources

Source

Type of data

Survey data

Type of statistic

National Statistics

Publisher

Department for Work and Pensions

Publication frequency

Yearly

Purpose of data source

The Households Below Average Income (HBAI) survey presents information on living standards in the UK and is the main source of data and information about household income and inequality in the UK.

Download the data

Income distribution - Spreadsheet (csv) 115 KB

This file contains the following variables: Measure, Time, Time_type, Ethnicity, Ethnicity_type, Income_Quintile_Distribution, Value.

Publication release date: 16 August 2018

full page history
  1. Updated to include new data (for 2014/15 to 2016/17). The figures for the period 2008/09-2010/11 to 2010/11-2012/13 have been revised. This is because in the data previously supplied by DWP, people of White ethnicity in Northern Ireland were classified as 'White Other', whereas in more recent data they have been classified as 'White British'.

From: Department for Work and Pensions

Previous edition:
  1. 4 March 2018

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