Taxes and revenue

Effects of taxes and benefits on UK household income: financial year ending 2022

What's in the bulletin?

• Median household income in the UK before taxes and benefits was £35,100 in the financial year ending (FYE) 2022, increasing to £38,200 after taxes and benefits.
• The richest fifth of people's average household income before taxes and benefits (£117,400) was 14 times larger than the poorest fifth (£8,300); however, this gap reduced to 4 times larger (£83,100 and £22,400, respectively) after taxes and benefits.
• Original income inequality (before taxes and benefits) increased by 1.5 percentage points to 50.1% between FYE 2021 and FYE 2022, while final income inequality (after taxes and benefits) increased by only 0.5 percentage points to 29.8%, highlighting the redistributive effect of taxes and benefits.