Incomes grew in 2009-2010 but future looks gloomy
A new report on income and inequality in the UK reveals that average take-home incomes continued to grow in 2009-10, despite the recession - but are set to go down in 2011-12 and beyond.
The report by the Institute for Fiscal Studies, funded by the Joseph Rowntree Foundation and the ESRC, charts the changes to average incomes, inequality and poverty since 1997 up to and including 2009-2010.
Findings show that incomes in Britain generally grew over the period 1996-97 to 2009-10, with an average growth in mean income of 1.9 per cent per year.
This growth was spread across most income groups, with a small increase in income inequality due to weaker growth among the lowest wage earners and stronger growth among the top earners.
The main driver for the recent income growth (2009-10) has been a strong growth in income from benefits and tax credits, which more than offset a real-terms fall in earnings.
But this increase in benefits and tax credits is "unlikely to be permanent", warns the report. Cuts to benefits and tax credits are likely to reduce household incomes and increase income inequality.
Download the report from the Institute for Fiscal Studies.
Find out more about inequality.
Posted on 20 June 2011
Further pages
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