Wealth and income in the United Kingdom are not distributed equally: we can see this from the graph below. But what does this really mean for people across the country? And how do the levels of inequality compare to the past, as well as to other countries?
View chart on a larger screen (chart details Gini coefficient, 2021 or latest available, for all G7 nations)
On the face of it, income inequality is a simple concept: the extent to which incomes are spread unevenly in a group of people. Similarly, wealth inequality is the extent to which wealth is distributed unevenly in a group of people.
Looking at a single measure of inequality, such as the Gini coefficient shown in the graph above, might give a part of the story. But the picture becomes much richer when we combine both income and wealth, along with data on relative poverty (as in the graph below), home ownership rates and inheritances.
View chart on a larger screen (chart details percentage of demographic group in relative poverty (after housing costs) over time)
This allows us to better interpret what might be happening ‘under the hood’ and paint a more detailed, and ultimately useful, picture of inequality across the UK. It also tells us how these might change over time: such as in the graph below, which charts the difference in home ownership across generations.
View chart on a larger screen (chart details percentage of individuals who are homeowners by age 30)
The 10 fundamental facts outlined in Wealth and income inequality: the fundamentals show the extent and nature of income and wealth inequality now, and tell us what the implications of economic inequality could be in the future, as we look ahead to 2040.
Inequality is, of course, so much broader than the gap between the rich and poor. We are addressing inequalities explicitly and consciously in all the themes covered in UK 2040 Options. But disparities in income and wealth have real and material impacts on people’s lives, impacting their ability to save, own a home or afford rent, access basic goods and services, and pass on opportunities to their children. Policy options that can tackle the challenges presented by income and wealth inequality will be needed, particularly as we look to 2040.
