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Household Incomes

Volume 448: debated on Thursday 29 June 2006

To ask the Chancellor of the Exchequer (1) what the (a) median and (b) mean household income was in the latest year for which information is available; and if he will make a statement; (80640)

(2) what the lower limit of the top decile for household earnings was in the latest year for which information is available; and if he will make a statement.

The information requested falls within the responsibility of the National Statistician who has been asked to reply.

Letter from Colin Mowl, dated 29 June 2006:

The National Statistician has been asked to reply to your recent Parliamentary Questions asking what the (a) median and (b) mean household income was in the latest year available and what is the lower limit of the top decile for household earnings for the latest year for which information is available. I am replying in her absence. (80640, 80641)

This response is based on the article titled ‘The effects of taxes and benefits on household income’ which takes account of all household income and can be found at http://www.statistics.gov.uk/taxesbenefits, as well as in the May 2006 edition of Economic Trends.

Disposable income is the income available for spending. It includes income from all sources after the deduction of income tax, National Insurance Contributions and council tax/Northern Ireland rates.

Using data based on the above analysis the median household disposable income for 2004/05 was £20,398.

Looking at table 14, appendix 1 (page 20), the mean household disposable income for 2004/05 was £25,360 per year.

The article does also show the means for various other definitions of income, such as gross income. However, the analysis does not show the medians for these other definitions of income. These medians can be obtained on request.

The analysis is based on an “equivalised” household disposable income distribution. “Equivalised” household disposable income distribution is a process that adjusts household income to take into account the different size and composition of households.

Using table 14 in appendix 1 (page 20) from the above analysis, the lower limit of the top decile for household disposable income was £40,385 per year (2004/05). An equivalent figure for household earnings has not been provided as this is only one part of income and would show a large variation of earnings within the top decile (and other deciles).

This detailed analysis is based on the Expenditure and Food Survey, which has a sample covering approximately 7,000 households in the UK.