Introduction to UK Household Income and Poverty Analysis

This presentation provides an in-depth analysis of household income distribution and related economic factors in the United Kingdom. The presentation begins by defining household income and its significance as an economic indicator, differentiating between mean and median income as key measurement tools. It explores changes in average incomes over time, highlighting adjustments made to historical data for inflation and household composition. The presentation then delves into income inequality, comparing the UK's standing with other developed countries and examining the spread of income across different regions. A significant portion is dedicated to poverty, including working poverty, child poverty, and the impact of tax and benefits. It presents statistical data on households below the poverty line and employees in poverty, along with the impact of poverty on pensioners. The presentation concludes by synthesizing the findings and emphasizing the complex relationship between employment, income, and poverty reduction, stressing the uneven distribution of income in the UK and the increasing child poverty levels. The presentation uses various graphs and statistical data to support the analysis, providing insights into the economic landscape of the UK.

Introduction to research in buisness
economics

Introduction
Household income is defined as
the total income
It is comprised by all individuals
who lives in a particular
household
Income deals with benefits as
well as salaries (Dynan,
Elmendorf and Sichel, 2012)
It is also referred to as economic
indicator
It is referred to as an economic
measure that is mostly applied on
a single household across a large
group of a population

Household Income
According to Sareen et al.
(2011), households deals with
more disposal income as
compared to any previous time
The author stated that
disposable incomes of the
poorest households has
increased as compared to pre-
downturn levels
The author stated that
disposable incomes of the
richest households has
decreased as compared to pre-
downturn levels

Disposable Income
Disposable income is regarded as a
widely used household income
measure
It is regarded as the total amount of
money that is available to the
households
They use the amount to invest as well
as save after deduction of direct taxes
The direct taxes include Income Tax,
National Insurance as well as Council
Tax (Blundell and Etheridge, 2010)
It also deals with earnings that are
earned by employers, individuals
through private pensions as well as
cash benefits that are provided by the
State

Comparison and Statistical Importance
According to Brewer and Wren‐Lewis (2016), the major
estimates of household income as well as inequality has altered over
time
The historic data have been adjusted in order to make robust
comparisons
The adjustments are majorly made to deal with the impacts of inflation
They are also equivalised to regard the changes in household
composition
The statistical importance indicates that whether a reported alteration
is likely to take place by chance (Fräßdorf, Grabka and Schwarze,
2011)
Any type of alteration is described as important that is at 95% level
This indicates that the difference that has taken place by chance is low

Household Income in the UK
It has been stated that income inequality in the
UK has decreased over the last decade
The United Kingdom has been regarded as a
wealthy country in terms of worldwide poverty
criteria
The individuals earn approximately £4 every
day (Anders, 2012)
The two major measures of average household
income includes median as well as mean

Household Income in the UK
The figure reflects on the distribution of
equivalized disposable income for the
financial year of 2017
The diagram clearly indicates the
distribution skewness
It shows that the mean income level is
£32,700
It shows that the median level is £27,300
This indicates that the mean income
level is greater as compared to the
median level
It shows that the greatest household
range belongs to the bracket from
£17,000 to £18,000.
It indicates the third decile of the
distribution

Growth of median and mean Household
Income in the UK
In the UK, the median
equivalised household disposable
income has been £27,300
The median disposable income
has however raised over time
during the financial year 2016,
after considering changes in
household structures as well as
regarding the inflation
It showed that the disposable
income has been £1600 more as
compared to the year 2008 that
witnessed economic downturn

Growth of median and mean Household
Income in the UK
The GDP per head in the UK has been adjusted for
inflation by making use of National Accounts
The median as well as mean time series has been adjusted
for inflation by making use of the customer price index
The index includes housing costs of the proprietors as well
as occupiers
The growth of GDP has been equivalised with the increase
in median household income (Thomas and Evans, 2010)
It increased during the period of economic development
however, decreased immediately after the downturn

Effect of The Economic Downturn
 The effect of economic downturn in the UK has been delayed on
median household incomes relative to the decrease in GDP per
head
 Since the year 2008, the average income of the poorest
households has increased by £1800
 The households in the UK ranked by their equivalised disposable
incomes, using the modified OECD scale
 The increase in the reported real terms has been estimated for early
years that has been adjusted to regard the inflation account

Income inequality in the UK
The scale of income inequality
In comparison to other developed
countries, the UK has a very high
income inequality level
The average disposable income of
households in the bottom 10% of the
population has been £9,644
The income deals with wags as well
as cash benefits (Blundell and
Etheridge, 2010)
The average disposable income of
households in the top 10% of the
population has been £83,875
In the UK, inequality is
greater among individuals
with original incomes as
compared to those with
disposable income
The poorest households have
an average of £4,436 on
original income
The richest households have
24 times more approximately
on original income

Spread of Income in the UK
The graph shows that top
1% have incomes that
greater than the individuals
who belongs to the rest 10%
It shows that in the year
2015, the average income of
the top 1% has been
£253,927 (Payne and Abel,
2012)
The average income of the
top 0.1% has been £919,882