The effects of taxes and benefits on household income, 2012/13

Document type
Report
Corporate author(s)
Great Britain. Office for National Statistics
Publisher
Office for National Statistics
Date of publication
26 June 2014
Series
Statistical bulletin
Subject(s)
Poverty Alleviation Welfare Benefits and Financial Inclusion
Collection
Social welfare
Material type
Reports

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This bulletin examines how taxes and benefits redistribute income between various groups of households in the UK. It shows where different types of households are in the income distribution and looks at the changing levels of income inequality over time. The overall impact of taxes and benefits are that they lead to income being shared more equally between households. In 2012/13, before taxes and benefits, the richest fifth (those in the top income quintile group) had an average original income of £81,300 per year, compared with £5,500 for the poorest fifth – a ratio of nearly 15 to 1. This ratio is broadly unchanged from 2011/12, indicating that inequality of original income has not changed substantially between the two years, according to this measure. Original income includes earnings, private pensions and investments.

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