Income distribution

Published

1. Main facts and figures

  • in this data, UK households were divided into 5 equally-sized groups (or ‘quintiles’) based on their income
  • in the 3-year period from 2015/16 to 2017/18, 76% of Pakistani households fell into the 2 lowest income quintiles (after housing costs) – the highest percentage out of all ethnic groups
  • over half of households from the Bangladeshi, Other Asian, Black and Other ethnic groups also fell into the 2 lowest income quintiles (after housing costs)
  • 42% of White British households fell into the 2 highest income quintiles (after housing costs) – the highest percentage out of all ethnic groups
  • 10% of Bangladeshi households fell into the 2 highest income quintiles (after housing costs) – the lowest percentage 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. Some households may contain members of different ethnic groups. As a result, this data does not reflect the distribution of household income by an individual’s ethnicity.

This data comes from the Family Resources Survey, which is a sample survey. It collects responses from a random sample of the population to make generalisations about the whole population.

The survey is then used to calculate the Households Below Average Income (HBAI) statistics.

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. As a result, 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. Use caution 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.

Some tests for significant differences between ethnic groups have not been carried out. This page includes commentary on differences between ethnic groups that are reasonably reliable.

What the data measures

This data measures how income is spread across UK households.

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
  • the highest end of the scale

By dividing UK households into these 5 groups, it’s possible to see where people from different ethnic groups fall on the scale.

An equal income distribution would mean that 20% of households in each ethnic group would fall within each of the 5 income quintiles.

Income is measured as total weekly household income from all sources after tax, national insurance and other deductions.

Data is 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.

Households that spend a large percentage 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 percentage of their income on housing costs are less likely to move from a higher to a lower quintile after housing costs.

In 2017/18, the average UK household income before housing costs was:

  • top quintile: £52,000
  • second highest quintile: £34,700
  • middle quintile: £26,400
  • second lowest quintile: £20,000
  • bottom quintile: £13,100

The average UK household income after housing costs was:

  • top quintile: £47,700
  • second highest quintile: £30,900
  • middle quintile: £22,800
  • second lowest quintile: £16,100
  • bottom quintile: £9,200

In a household headed by a single person, income will go further than in a household containing adults and children.

For this reason, household income is adjusted (or ‘equivalised’) to take into account the number of adults and children who live there.

The ethnic categories used in this data

The Family Resources Survey uses the following ethnic categories:

Asian/Asian British:

  • Indian
  • Pakistani
  • Bangladeshi
  • Chinese
  • Other Asian

Black/African/Caribbean/Black British

Mixed/Multiple ethnic groups

White:

  • White British
  • White Other (White ethnic minorities)

Other ethnic group

Please note that the previous version of this page showed data only for the broad Asian ethnic group, not the 5 specific Asian ethnic groups.

2. By ethnicity (before housing costs)

Percentage of households in each income quintile (before housing costs), by ethnicity
Ethnicity Bottom quintile (lowest income) Second lowest quintile Middle quintile Second highest quintile Top quintile (highest income)
% % % % %
Asian 31 22 17 15 14
Bangladeshi 39 28 19 11 4
Chinese 28 14 20 16 22
Indian 21 17 19 21 22
Pakistani 46 26 16 7 5
Asian other 24 28 15 18 15
Black 30 25 20 15 10
Mixed 27 17 17 23 16
White 18 20 20 21 21
White British 18 20 21 21 21
White other 20 18 17 20 25
Other 30 21 15 18 16

Download table data for ‘By ethnicity (before housing costs)’ (CSV) Source data for ‘By ethnicity (before housing costs)’ (CSV)

Summary

This data shows that, before housing costs were deducted:

  • 46% of Pakistani households were in the lowest income quintile, the highest percentage out of all ethnic groups
  • the Pakistani ethnic group also had the largest percentage of households in the lowest 2 income quintiles (at 72%), while the White British, Other White, and Indian ethnic groups had the smallest percentage (at 38%)
  • the Bangladeshi ethnic group had the smallest percentage of households in the highest income quintile (at 4%), while the Other White group had the largest percentage (at 25%)
  • there were 3 times as many Black households in the lowest income quintile (30%) as in the highest income quintile (10%)

3. By ethnicity (after housing costs)

Percentage of households in each income quintile (after housing costs), by ethnicity
Ethnicity Bottom quintile (lowest income) Second lowest quintile Middle quintile Second highest quintile Top quintile (highest income)
% % % % %
Asian 33 25 17 13 13
Bangladeshi 44 30 16 6 4
Chinese 32 18 17 13 20
Indian 21 18 20 20 20
Pakistani 42 34 13 6 5
Asian other 35 26 14 14 12
Black 40 22 17 13 9
Mixed 34 15 19 17 15
White 18 20 21 21 21
White British 17 20 21 21 21
White other 25 20 17 19 20
Other 40 19 12 15 13

Download table data for ‘By ethnicity (after housing costs)’ (CSV) Source data for ‘By ethnicity (after housing costs)’ (CSV)

Summary

This data shows that, after housing costs were deducted:

  • White British households had the largest percentage of households in the highest income quintile (21%), and the smallest percentage in the lowest income quintile (17%)
  • Bangladeshi households had the smallest percentage of households in the highest income quintile (4%), and the largest percentage in the lowest income quintile (44%)
  • the ethnic groups with the largest percentage of households in the 2 lowest quintiles were Pakistani (76%), Bangladeshi (74%) and Black (62%)
  • by comparison, 37% of White British households fell into the 2 lowest income quintiles

4. Methodology

The data for this measure comes from the Family Resources Survey (FRS). Households Below Average Income (HBAI) statistics are based on this data.

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

Household income is taken from all sources of all household members, including dependents. Main income sources include:

  • gross income from employment, or profits from self-employment (after deductions like income tax)
  • 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 or milk, and free TV licences for pensioners aged 75 years and over.

Total household income is calculated after deducting:

  • council tax
  • child maintenance and child support payments (which are deducted from the income of the person making the payment)
  • 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, 2015/16 to 2017/18, the FRS sample consisted of almost 60,000 households in the UK. Individuals are not followed up for later surveys.

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

Only households where every resident over the age of 16 responds are included in the analysis. The characteristics of people living in households which do not respond fully may be different to those who do. As a result, the sample will be more representative of those who do respond fully. 52% of households fully co-operated with the survey, meaning there was a sample size of 19,136 households in 2017/18.

The FRS only covers private households. People who live in communal housing (for example, care homes) or have no fixed address are not included in this data.

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

As the data is a 3-year average, no tests have been carried out for statistical significance.

In other words, as the results are based on a sample of the population, it isn’t possible to determine whether any differences observed would likely be seen across the entire population. This means that conclusions about 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

5. 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.

6. Download the data

Income distribution data - Spreadsheet (csv) 187 KB

This file contains the following variables: Measure, Time, Time_type, Ethnicity, Ethnicity_type, Income Quintile Distribution, Value