Category: income and wealth distribution

The distribution of income and wealth

The distribution of income measures how personal or household income is distributed among different income groups in society. The term is also use to measure other forms of distribution such as regional, race, gender and generational. It can also be extended to the international distribution of income between countries

The distribution of wealth also measures how personal or household wealth is distributed among different groups in society. The main difference between income and wealth is that income is a flow and wealth is a stock.

Much like any other country there has always been income and wealth inequality. Hypothetically if the UK seen huge economic growth and full employment, the incomes of the rich would rise at a faster proportionate rate when in comparison of the poor. Fast economic growth widens the inequality gap even though the poorest groups in society are absolutely better off.



This graph displays the income inequality in the UK and the government intervention put in place in an attempt to tackle this. The net income is a less steep elevation of inequality due to tax credits and other welfare measures working alongside a progressive tax system. The graph above does not show the full extent of the difference between the richest and the rest of society. This is because the top 1% have incomes substantially higher than the rest of those in the top 10%. In 2012, the top 1% had an average income of £253,927 and the top 0.1% had an average income of £919,882.

Wealth in Great Britain is even more unequally divided than income. The richest 10% of households hold 45% of all wealth. The poorest 50%, by contrast, own just 8.7%.


This pie chart displays the huge inequality when regarding wealth in the UK. This wealth as well as being concentrated within a small minority of people, is concentrated in certain regional areas.

As demonstrated below.



The gini coefficient is a statistical measure of the degree of variation represented in a set of values. The higher the Gini coefficient the higher the inequality.


The UK was considerably more equal before the industrial revolution where the only real trade was agricultural. After the revolution, money was made but most of it was for managers or people in corporate positions. The UK seen real economic growth but like I mentioned earlier it widens inequality. This inequality continued until after the world wars where there was a post war consensus which saw the dawn of the welfare state and the national health service. This consensus was treated with complete disregard by prime minister Thatcher, who favoured a free market approach and privatised UK state industries. Her time in office 1979 to 1990 displays a huge rise in inequality in the UK. Which has been difficult diminish to this current day.


There are multiple factors of income inequality in the Uk such as rising property price due to scarcity of housing in the uk means landlords have benefited as they have the ability to charge a higher price as there is huge demand and little supply. Also jobs at the top end of the employment ladder have seen huge pay rises widening the gap from lower skilled workers. Bankers who failed to protect the Uk from the credit crunch have seen huge bonuses whilst the rest of the country faces austerity measures. Also as long as we remain in the EU free movement of labour has created much more competition for low paid, low skilled workers, leading to more unemployment.


In my opinion an even more concerning gap is the wealth inequality in the uk. Once you become rich it’s easier to make money and more rewarding to save money. Whereas if you less money it’s harder to profit from capital gains and save money as income is almost all necessary for survival. The rich may own lots of land or the most expensive houses which rise in price whereas the poor might rent which leaves them no capital gains from their property. Inheritance means families stay rich and wealthy throughout generations and promotes conservatism with their money. This creates inequality from birth as you are born into either wealth or poverty. As well as that inheritance and wealth is lightly taxed in comparison to income.

The uk faces many social problems there’s huge political apathy, drug abuse, xenophobia just to name a few. A more equal society is proven to lead to a happier nation with less crime.