Today’s disposable income figures from the ONS offer a picture of how much different households across the country have to spend, and how far apart their experiences are.

There has been a slight increase in the Gini measure of inequality, up from 32.4 in 2013/14 to 32.6 in 2014/15. Although this change is not statistically significant, it shows how unsuccessful the Government has been at reducing the UK’s extreme inequality.

After paying direct taxes like income tax and council tax, the richest 10% of households have an annual disposable income of £77,843. That is 8.6 times the disposable income of the poorest 10% of households, who must make ends meet on a paltry £9,037. Without taxes and benefits, the richest 10% would have incomes 24 times those of the poorest 10%, which shows just how vital our system of redistribution is for keeping inequality in check.

We should also remember that this release, valuable though it is, doesn’t provide the full picture on inequality. The survey it is based on, the Living Costs and Food Survey, is not particularly good at telling us about the incomes of the top 1 per cent. After 40 years of them dramatically increasing their share of the nation’s total income, the recession paused the top 1 per cent’s inexorable rise, but this trend has now resumed. If we know the richest 1 per cent is racing away from the rest of us, it’s likely that the Gini is understated, and so greater efforts are needed to effectively tackle our economic divide.

Sadly, it seems Government policy is likely to be taking us in the wrong direction. The Resolution Foundation recently forecasted greater divergence of incomes in the next few years, driven particularly by income reductions for the poorest quarter as a result of cuts to benefits and in-work support. Worryingly, it predicts this is ‘likely to entirely reverse the gains made on inequality in the post-crisis period’. We cannot afford for the gap to widen further, but in order for it to narrow, we need the courage and conviction of politicians, businesses and ordinary people to bring about change. 

Lucy Shaddock, Policy & Campaigns Officer