Income distribution

What does this chart show?

The piechart divides the London population into 10 equally sized groups, and shows their share of all of London’s income, on a before housing costs basis.* This is all the income recorded by the Family Resources Survey dataset – such as earnings, benefits, pensions and other types such as capital income. This amounted to around £2.4 billion total income per week in this period. The bottom 10% of London household’s received only 2% of all income in London in the three years to 2015–16. In contrast, the top 10% received nearly a third (29%) of all income – more than the bottom 50%. All deciles in London received less than they would under a totally even division of income up to the 7th decile.

That the top 10% received nearly twice as much income as the second highest 10%, 29% compared with 15%, demonstrates the concentration of income at the top. Although we do not have data for London, for the UK the top 1% of the population accounted for 12% of income received in 2012, and the top 0.1% accounted for 4.5% of all income (World Wealth and Income Database).

London has a Palma ratio of 1.7, meaning the top 10% have 1.7 times more income than the bottom 40% of households combined.**

However, income is more evenly distributed than wealth.

* This is on a BHC basis because AHC income often contains negative values. 

** A Palma ratio is a measure of inequality, which compares the income of the top 10% of households with that of the bottom 40% of households. 

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