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IFS Press Releases
July 2000
Article
Households below average income
Type: IFS Press Releases

The government published today the latest in its series of statistics on the number of households with below-average income. Included in this report are figures illustrating the growth in real median incomes at different points in the income distribution between 1994/5 and 1998/9. In Tables 1 and 2 below these figures have been broken down further in order to assess and compare the changes that occurred before the May 1997 election and what happened to the distribution of income during the first two years of the New Labour government. Table 1 shows this breakdown for income before housing costs are deducted; table 2 presents the figures for after housing costs income.

Table 1: Real percentage change in median before housing costs income, by decile

Before housing costs income decile

 
1994/5-1996/7

 
1996/7-1998/9

Whole period
1994/5-1998/9

1

1.8

1.9

3.7

2

2.7

3.4

6.3

3

2.7

4.2

7.0

4

3.7

3.6

7.5

5

4.0

3.5

7.7

6

3.8

3.4

7.4

7

3.0

4.4

7.6

8

3.3

5.0

8.4

9

4.1

4.7

8.9

10

4.3

7.1

11.7

Table 2.9; Real percentage change in median after housing costs income, by decile

After housing costs income decile

 
1994/5-1996/7

 
1996/7-1998/9

Whole period
1994/5-1998/9

1

10.6(*)

5.5

16.7

2

0.9

5.5

6.5

3

2.8

5.4

8.3

4

3.4

5.6

9.2

5

4.9

3.6

8.7

6

4.6

3.9

8.6

7

4.3

4.7

9.2

8

4.4

4.4

9.0

9

5.4

4.5

10.2

10

5.9

6.8

13.1
*The particularly large real increase in median AHC incomes in the bottom decile are largely a product of falling interest rates, which generate proportionately bigger reductions in the housing costs of those with temporarily low incomes but large mortgages.
  Ends

Notes to editors

  1. For more information contact Jayne Taylor at IFS on 020 7291 4800
  2. We refer to a press release issued today by the Department of Social Security.

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