How has income growth been shared since the 1960s? 21 February 2018 Household incomes are the best measure of living standards we have. How those incomes grow (or fall) for different groups is a key measure of the state of the economy and inequality. Earnings, employment, prices, taxes, benefits, pensions and demographic changes are all reflected in average household incomes. The graphs below show the pace of inflation-adjusted income growth across the income distribution and in different time periods. A high flat line would mean strong growth and no change in inequality. And while average annual growth of 3 per cent may not sound like much, it only takes 24 years of such growth for incomes to double. Higher growth on the right of the curve than on the left represents richer households pulling away from poorer ones, increasing inequality, while a downward sloping line represents a relative narrowing of the income gap. Given the importance of housing costs, we can also look at disposable incomes before and after the cost of rents and mortgage interest. And we can separate out working age households and pensioners, given that the two groups often face quite different challenges. With the interactive set of graphs below, you can select whether to look before or after housing costs; at all ages, working-age households or retired households; and which time period(s) to focus on, with backwards-looking data from 1961 to 2016-17. Different periods have seen very different levels and distributions of growth. We also include our own projection for growth between 2016-17 to 2020-21.
