What are the regional differences in income and productivity?
Explore economic inequality in the UK with our map
17 May 2021
The areas where people have the highest income are not always those that contribute the most to the economy.
In some areas of the UK, economic output – the value of goods and services produced – may be high, but people’s household income may not match it, and in some areas, both output and income are low.
From the so-called “North-South divide”, to the effect of commuting from high income homes to work in lower income areas, this interactive article explores the economic inequality in the UK.
Is there a North-South divide?
Compared to other parts of the United Kingdom, London and the South East had the highest income and productivity in 2018, based on the most recent data available.
Household income in this article includes wages and income from property and financial assets but does not include living costs such as rent or mortgages. We measure income per person in an area. The technical term is “gross disposable household income (GDHI) per capita”.
Over time, how economically productive an area is largely determines that region's standard of living. We measure productivity by taking economic output — the value added to the economy from goods and services, or gross value added (GVA) — and dividing by the number of hours worked.
Bar charts showing that London and the South East had the highest average income and productivity of any area in the country in 2018.
Where has the highest and lowest income or productivity?
When we map these measures to a smaller geographic level, some interesting trends start to emerge.
This map shows how household income varies across the UK. The legend in the top right-hand corner shows marks for each area, relative to the UK average.
In 2018, higher income areas were in the south, Cheshire, North Yorkshire, East Cumbria, and also Edinburgh, Aberdeen and the east of Scotland.
Zooming in on London, we can highlight the built-up areas where people live. Dark blue shows areas with the highest household income.
Levels of income were particularly high in central London areas such as Kensington and Chelsea, Hammersmith and Fulham, Camden and City and Westminster.
The lowest income areas were mostly urban areas in the Midlands, North West, North East, and Yorkshire and The Humber.
These include Manchester, Birmingham and Nottingham — major UK cities with household income among the lowest in the country, even though their levels of productivity are closer to the national average.
In some areas, this might be to do with a “commuter effect”, where individuals who earn high incomes working in the city did not live there.
For example, the higher income areas of Worcestershire and Warwickshire are within commuting range of Birmingham.
A map of productivity, a measure of economic activity in an area, shows a slightly different picture to household income.
High productivity areas outside of London are often car manufacturing hubs, such as Sunderland, Swindon and Solihull.
The lowest productivity areas are typically more rural, like East Sussex or Somerset.
Although a few low productivity areas are urban areas, like Wolverhampton, Stoke-on-Trent or Greater Manchester North East, which includes Oldham and Rochdale.
All parts of Wales have below UK average productivity, but its highest productivity areas are mainly in the south, the most urbanised and densely populated part of the country.
Powys has the lowest productivity of all subregions in Britain. It also shares borders with the second and third lowest productivity regions, Herefordshire and Conwy and Denbighshire.
Comparing household income and productivity
We would generally expect household incomes to be higher where productivity is higher. However, it is possible for the two to diverge, such as in the case of the “commuter effect” referenced earlier.
Looking at the relationship between productivity and income in different parts of the UK can tell us about the economic characteristics of that region. Some parts of the country may have higher levels of non-wage incomes that can lead to higher household incomes relative to productivity in those regions.
We can measure each region or country against the UK averages for productivity and income in any given year using an index (UK average = 100).
The difference between the two indices for productivity and income shows which index is stronger.
Bar chart showing that the south and east of England had higher income than productivity relative to the rest of the UK in 2018.
In 2018, household income in the East of England was 5.2% higher than the UK average, and productivity was 4.8% lower than the UK average. This means the incomes index was 10 points greater than the productivity index.
The South East, South West and London also had higher relative levels of income than productivity.
The North West and North East had the opposite relationship, with productivity higher relative to income.
This is a clear north-south divide at a regional level. In the south of England and the East Midlands, incomes tend to exceed productivity. Elsewhere they do not.
Mapping both income and productivity
Overlaying the two measures on a map shows areas that are above and below UK average for income and productivity.
In 2018, areas with above average productivity and income were mostly in southern England and parts of Scotland. These areas can be seen on the map and in the top right of the scatter chart.
Of the 168 subregions in Britain, 95 experienced both productivity and incomes below the overall levels for the UK, as did Northern Ireland.
These areas included Wales and the eastern and western edges of England such as Norfolk, Cornwall, Lincolnshire and Northumberland.
Areas with below average productivity but above average income were mostly rural areas within commuting distance of large cities. North Yorkshire and East Cumbria were in this quadrant.
Areas with above average productivity but below average income were mostly urban areas outside of London.
Focusing on Scotland, 14 of 23 regions had below average income and productivity.
The City of Edinburgh had productivity and income well above UK average, and is a financial and legal centre.
Edinburgh also had several areas surrounding it that were high productivity and low income.
There is high productivity and incomes around Aberdeenshire, which is the centre of the North Sea oil industry.
By constrast, Glasgow has the lowest household income of all Scottish regions and the eighth lowest productivity.
In England, a significant number of southern areas had higher than average income, likely due to the wider influence of business and commuting around London.
In Greater London, both income and productivity were higher than average in most areas. In some areas of central London income far outstripped productivity.
Tower Hamlets, home to Canary Wharf as well as some more deprived neighbourhoods, had the highest productivity in Great Britain, but its income was much closer to the national average.
Explore the data
Select an area on the map, scatter chart or drop-down menu to see how it compares for income and productivity.
Scroll to continue
In 2018 Aberdeen City and Aberdeenshire was among the areas with above average income and above average productivity.
Aberdeen City and Aberdeenshire had an annual disposable household income of £21,648 per person (2.6% higher than the UK average) and productivity of £37.60 per hour worked (7.3% higher than the UK average).
More information
This article is part of a two-part interactive series on economic disparities. The second part explores income deprivation levels between and within local authorities in England.
This piece was based on Regional gross disposable household income, UK: 1997 to 2018 and Subregional productivity in the UK: February 2020.
Combined source data tables have been published alongside this release.