UK: Income inequality: Trends and Measures

Source: The Equality Trust

Key Points

• UK income inequality increased by 32% between 1960 and 2005. During the same period, it increased by 23% in the USA, and in Sweden decreased by 12%.


• In the 1960s Sweden and the UK had similar levels of income inequality. By 2005 the gap between the two had increased by 28%.


• Since the 1980s income inequality in the United States and the UK has increased substantially and has returned to levels not seen since the 1920s.

The growth in inequality in the last 30 years has been driven by the top 1% of wage incomes.
• Inequality measures drawn from standard household surveys underestimate income inequality by as much as 10 percentage points, due to the under-representation of the top 1% of incomes.


• There is scope for governments to tackle inequality. Large income inequalities are not inevitable; Sweden owes its high levels of equality to policies introduced since the 50s.

Equality trust research digest: trends & measures 2:2011