Taxes and revenue

Effects of taxes and benefits on UK household income: financial year ending 2021

What's in the bulletin?

• In the financial year ending (FYE) 2021, which covered the first year of the coronavirus pandemic, the median household income in the UK before taxes and benefits was £34,000, increasing to £37,600 after taxes and benefits.
• The richest fifth of people’s average household income before taxes and benefits (£107,600) was 13 times larger than the poorest fifth (£8,200); however, this reduced to 4 times larger (£79,200 and £21,400, respectively) after taxes and benefits.
• Over the 10-year period leading up to FYE 2021, the richest fifth of people’s average household income after taxes, benefits and price inflation increased by an average of 1.7% per year, compared with the poorest fifth, which increased by an average of 1.5% per year.