Average annual incomes, taxes and benefits, and household characteristics of retired and non-retired households in the UK. Data for financial years, by quintile and decile groups, country and region and tenure type.

Data on the effects of taxes and benefits on household income publication from 2001, including average incomes, taxes and benefits and household characteristics of all, retired and non-retired individuals and households in the UK by quintile and decile groups.

Abstract copyright UK Data Service and data collection copyright owner. This analysis, produced by the Office for National Statistics (ONS), examines how taxes and benefits redistribute income between various groups of households in the United Kingdom. It shows where different types of households and individuals are in the income distribution and looks at the changing levels of income inequality over time. The main sources of data for this study are: Family Expenditure Survey (FES) from 1977-2001Expenditure and Food Survey (EFS) from 2001-2007Living Costs and Food Survey (LCF) from 2008 to 2017Household Finances Survey (HFS) from 2018 onwards Some variables have been created by combining data from the LCF (previously FES or EFS) with control totals from a variety of different government sources, including: United Kingdom National Accounts (ONS Blue Book)HM Revenue and Customs (HMRC)Department for Transport (DfT)Department of Health (DH)Department for Education and Employment (DfEE)Department for Communities and Local Government (DCLG) For further information, see the ONS Effects of taxes and benefits on household income webpage.Users should note that this combined ETB household (1977-2021) and person (2018-2021) datasets replace all previous individual year files, which have been withdrawn from use at the depositor's request. Latest edition informationFor the second edition (September 2022), revised data for 2019/20 and new cases for 2020/21 were added to the household and person files. Method of Data Collection The ETB has been produced each year since 1961 and is an annual analysis looking at how taxes and benefits affect the income of households in the UK. Since 2018, the estimates in this analysis are based on data derived from the HFS Survey (the HCF is not currently held by the UK Data Service). The HFS is an annual survey of the expenditure and income of private households. People living in hotels, lodging houses, and in institutions such as old people's homes are excluded. Each person aged 16 and over keeps a full record of payments made during 14 consecutive days and answers questions about hire purchase and other payments; children aged 7 to 15 keep a simplified diary. The respondents also give detailed information, where appropriate, about income (including cash benefits received from the state) and payments of Income Tax. Information on age, occupation, education received, family composition and housing tenure is also obtained. The survey is continuous, interviews being spread evenly over the year to ensure that seasonal effects are covered. The Family Spending publication also includes an outline of the survey design. The HFS data used in this analysis are grossed so that totals reflect the total population of private households in the UK. The weights are produced in two stages. First, the data are weighted to compensate for non-response (sample-based weighting). The non-response weights are then calibrated so that weighted totals match population totals for males and females in different age groups and for different regions and countries (population-based weighting). The results in the analysis are weighted so that statistics represent the total population in private households in the UK based on 2011 Census data. In 2013/14, an additional calibration to the Labour Force Survey (LFS) employment totals was also applied. There are a number of different measures of income used, the most common of which is probably household disposable income. This is the total income households receive from employment (including self-employment), income from private pensions, investments and other sources, plus cash benefits (including the state pension), minus direct taxes (including income tax, NI and council tax). Income is normally analysed at the household level as this provides a better measure of people's economic well-being; while income is usually received by individuals, it is normally shared with other household members (e.g. spouse/partner and children). In 2018/19 a further adjustment was applied to the data to adjust for the under coverage and under-reporting of income of the richest individuals. This method is often referred to as the 'SPI adjustment' owing to its use of HM Revenue and Customs (HMRC's) Survey of Personal Incomes (SPI). For further details please see the ETB Quality and Methodology Information webpage and the Effects of Taxes and Benefits on Household Income Technical Report. Data Sources The Household Finances Survey (HFS) is the source of the microdata on households from 2018 onwards. Previously, the Living Costs and Food Survey (LCF) was the data source. Derived variables are created using information from HFS and control totals from a variety of different government sources including the United Kingdom National Accounts (ONS Blue Book), HM Revenue and Customs, Department for Transport, Department of Health, Department for Education and Employment, and Department for Communities and Local Government. Secure Access version A Secure Access version of the ETB is available from the UK Data Archive under SN 8253, subject to stringent access conditions. The Secure Access version includes variables that are not included in the standard End User Licence (EUL) version, including case number, age and economic position of chief economic supporter, and government office region. Users are strongly advised to check whether the EUL version is sufficient for their needs before considering an application for the Secure Access version. Main Topics: The analysis considers the distribution of household income using five income measures in order to assess the effect of government intervention. The five income measures are: original income: includes income from employment, self-employment, investment income, occupational pensions and annuitiesgross income: original income plus cash benefitsdisposable income: gross income minus direct taxes (income tax, employees' National Insurance contributions and local taxes)post-tax income: disposable income minus indirect taxesfinal income: post-tax income plus benefits in kind (from education, the national health system, travel and housing subsidies). Standard measures: Historically, the equivalence scale used in this analysis was the McClements scale (before housing costs are deducted). To allow for better comparability with other sources, this analysis adopted the modified-OECD scale for the 2009/10 article. The modified-OECD scale usually assigns a weight of 1.0 for the first adult in a household, 0.5 for each additional adult and a weight of 0.3 for each child (defined as those under 14 years old). However, in this analysis the modified-OECD scale has been rescaled so that a two adult household equivalence value is 1.0. This makes it easier to compare with data that uses the McClements equivalence scale without making any difference to the overall results. The values for each household member are added together to give the total equivalence number for that household. This number is then used to divide disposable income for that household to give equivalised disposable income.

Examines how taxes and benefits redistribute income between various groups of households in the UK. The study shows where different types of households and individuals are in the income distribution and looks at the changing levels of income inequality over time.

Source agency: Office for National Statistics

Designation: National Statistics

Language: English

Alternative title: household income

This analysis, produced by the Office for National Statistics (ONS), examines how taxes and benefits redistribute income between various groups of households in the United Kingdom. It shows where different types of households and individuals are in the income distribution and looks at the changing levels of income inequality over time. The main sources of data for this study are:

• Family Expenditure Survey (FES) from 1977-2001
• Expenditure and Food Survey (EFS) from 2001-2007
• Living Costs and Food Survey (LCF) from 2008 onwards

Some variables have been created by combining data from the LCF (previously FES or EFS) with control totals from a variety of different government sources, including:

• United Kingdom National Accounts (ONS Blue Book)
• HM Revenue and Customs (HMRC)
• Department for Transport (DfT)
• Department of Health (DH)
• Department for Education and Employment (DfEE)
• Department for Communities and Local Government (DCLG)

The Effects of Taxes and Benefits on Household Income (ETB) has been produced each year since 1961 and is an annual analysis looking at how taxes and benefits affect the income of households in the UK. The estimates in this analysis are based mainly on data derived from the LCF Survey, which replaced the Family Expenditure Survey (FES) from 2001/02, and was known as the EFS until 2008. The LCF is an annual survey of the expenditure and income of private households. People living in hotels, lodging houses, and in institutions such as old people’s homes are excluded. Each person aged 16 and over keeps a full record of payments made during 14 consecutive days and answers questions about hire purchase and other payments; children aged 7 to 15 keep a simplified diary. The respondents also give detailed information, where appropriate, about income (including cash benefits received from the state) and payments of Income Tax. Information on age, occupation, education received, family composition and housing tenure is also obtained. The survey is continuous, interviews being spread evenly over the year to ensure that seasonal effects are covered. The Family Spending publication also includes an outline of the survey design.

The LCF data used in this analysis are grossed so that totals reflect the total population of private households in the UK. The weights are produced in two stages. First the data is weighted to compensate for non-response (sample-based weighting). The non-response weights are then calibrated so that weighted totals match population totals for males and females in different age groups and for different regions and countries (population-based weighting). The results in the analysis are weighted so that statistics represent the total population in private households in the UK based on 2011 Census data. In 2013/14, an additional calibration to Labour Force Survey (LFS) employment totals was also applied.

There are a number of different measures of income used, the most common of which is probably household disposable income. This is the total income households receive from employment (including self-employment), income from private pensions, investments and other sources, plus cash benefits (including the state pension), minus direct taxes (including income tax, NI and council tax). Income is normally analysed at the household level as this provides a better measure of people's economic well-being; while income is usually received by individuals, it is normally shared with other household members (e.g. spouse/partner and children).

In 2018/19 a further adjustment was applied to the data to adjust for the under coverage and under-reporting of income of the richest individuals. This method is often referred to as the 'SPI adjustment' owing to its use of HM Revenue and Customs (HMRC's) Survey of Personal Incomes (SPI). For further details please see the ETB Quality and methodology information webpage and the Effects of taxes and benefits on household income technical report.

The Living Costs and Food Survey (LCF) is the source of the microdata on households from 2008-09 onwards. Previously, the Expenditure and Food Survey (EFS) was the data source. Derived variables are created using information from LCF and control totals from a variety of different government sources including the United Kingdom National Accounts (ONS Blue Book), HM Revenue and Customs, Department for Transport, Department of Health, Department for Education and Employment, and Department for Communities and Local Government.

For further information, see the ONS Effects of taxes and benefits on household income webpage.

Variables available in the Secure Access version
The Secure Access version of the ETB datasets include additional variables not included in the standard End User Licence (EUL) versions (available under GN 33299). Extra variables include:

• CASENO (case number): all years
• CESAGE (age of chief economic supporter): 1991-2015
• CESEMPST (economic position of chief economic supporter): 1991-2015
• GGOR (Government Office Region): 2000-2015
• CES (chief economic supporter flag): 2001-2015

Prospective users of a Secure Access version of the ETB will need to fulfil additional requirements, commencing with the completion of an extra application form to demonstrate to the data owners exactly why they need access to the extra, more detailed variables, in order to obtain permission to use that version. Secure Access users must also complete face-to-face training and agree to Secure Access' User Agreement (see 'Access' section below). Therefore, users are encouraged to download and inspect the EUL version of the data prior to ordering the Secure Access version.

The second edition (June 2021) includes data files for 2016/17, 2017/18 and 2018/19. The documentation has been updated accordingly.

The analysis considers the distribution of household income using five income measures in order to assess the effect of government intervention. The five income measures are:original income: includes income from employment, self-employment, investment income, occupational pensions and annuitiesgross income: original income plus cash benefitsdisposable income: gross income minus direct taxes (income tax, employees' National Insurance contributions and local taxes)post-tax income: disposable income minus indirect taxesfinal income: post-tax income plus benefits in kind (from education, the National Health Service (NHS), travel and housing subsidies)Standard Measures: Historically, the equivalence scale used in this analysis was the McClements scale (before housing costs are deducted). To allow for better comparability with other sources, this analysis adopted the modified-OECD scale for the 2009/10 article. The modified-OECD scale usually assigns a weight of 1.0 for the first adult in a household, 0.5 for each additional adult and a weight of 0.3 for each child (defined as those under 14 years old). However, in this analysis the modified-OECD scale has been rescaled so that a two adult household equivalence value is 1.0. This makes it easier to compare with data that uses the McClements equivalence scale without making any difference to the overall results. The values for each household member are added together to give the total equivalence number for that household. This number is then used to divide disposable income for that household to give equivalised disposable income.

Provides early or provisional estimates of median equivalised disposable income and measures of income inequality ahead of revised estimates from the effects of taxes and benefits on household income.

Provides early or provisional estimates of median equivalised disposable income and measures of income inequality ahead of revised estimates from the effects of taxes and benefits on household income.

This article looks at how benefits in kind households receive from the state are measured within the Effects of Taxes and Benefits on Household Income publication and how the methodology behind these measurements has changed between the years 2005/06 and 2010/11. We also retrospectively apply the current methodology back to the year 2005/06 in order to produce a consistent series showing how the size and distribution of benefits in kind received by households have changed over time. Source agency: Office for National Statistics Designation: Supporting material Language: English Alternative title: Methodological Changes in the Measurement of Benefits in Kind

Estimates of mean and median annual incomes in the UK, by quintile groups. The redistribution effects on individuals of direct and indirect taxation and benefits received in cash or kind.

Net wages were the greatest contributor to household disposable income in the European Union in 2023, followed by social benefits. Net wages' share of household income has been rising consistently since 2012, when it was 34.5 percent, to reach 36.8 percent in the most recent year. Social benefits and transfers saw a sharp uptick in 2020, when governments across the EU increased support to citizens due to the economic impact of the COVID-19 pandemic, while taxes were reduced. Since then, however, benefits and transfers to households have been reduced, while taxes have slowly risen again.

Households in the Indian and White Other ethnic groups received the highest percentage of their income from employment out of all ethnic groups.

Information on net earnings (net pay taken home, in absolute figures) and related tax-benefit rates (in %) complements gross earnings data with respect to disposable earnings. The transition from gross to net earnings requires the deduction of income taxes and employee's social security contributions from the gross amounts and the addition of family allowances, if appropriate.

The amount of these components and therefore the ratio of net to gross earnings depend on the individual situation. A number of different family situations are considered, all referring to an average worker. Differences exist with respect to the number of workers/earners (only in the case of couples), number of dependent children, and level of gross earnings, expressed as a percentage of the gross earnings of an average worker (AW).

All the data are based on a widely acknowledged model developed by the OECD, where figures are obtained from national sources (for further details on data providers, see the national contact list in Annex).

The collection contains, for selected situations, data for the following variables and indicators :
a) gross and net earnings, including the transition components "income taxes", "employee's social security contributions" and "family allowances", if appropriate;
b) tax rate, defined as the income tax on gross wage earnings plus the employee's social security contributions less universal cash benefits, expressed as a percentage of gross wage earnings;
c) tax wedge on labour costs, defined as income tax on gross wage earnings plus the employee's and the employer's social security contributions, expressed as a percentage of the total labour costs of the earner. The total labour costs of the earner are defined as his/her gross earnings plus the employer's social security contributions plus payroll taxes (where applicable). The tax wedge on labour costs structural indicator is available only for single persons without children earning 67% of the AW.
d) unemployment trap, measuring the percentage of gross earnings which is taxed away through higher tax and social security contributions and the withdrawal of unemployment, and other, benefits when an unemployed person returns to employment. This structural indicator is available only for single persons without children earning 67% of the AW when in work.
e) low wage trap, measuring the percentage of gross earnings which is taxed away through the combined effects of income taxes, social security contributions and any withdrawal of benefits when gross earnings increase from 33% to 67% of AW. This structural indicator is available for single persons without children and one-earner couples with two children.

The Social Policy Simulation Database and Model (SPSD/M) is a tool designed to assist those interested in analyzing the financial interactions of governments and individuals in Canada. It can help one to assess the cost implications or income redistributive effects of changes in the personal taxation and cash transfer system. As the name implies, SPSD/M consists of two integrated parts: a database (SPSD), and a model (SPSM). The SPSD is a non-confidential, statistically representative database of individuals in their family context, with enough information on each individual to compute taxes paid to and cash transfers received from government. The SPSM is a static accounting model which processes each individual and family on the SPSD, calculates taxes and transfers using legislated or proposed programs and algorithms, and reports on the results. A sophisticated software environment gives the user a high degree of control over the inputs and outputs to the model and can allow the user to modify existing programs or test proposals for entirely new programs. The model comes with full documentation including an on-line help facility. Some potential uses of the model are illustrated by the following list of questions which may be answered using the SPSM: how large an increase in the federal Child Tax Benefit could be financed by allocating an additional $500 million to the program? which province would have the most advantageous tax structure for an individual with $45,000 earned income, 2 children and $15,000 of investment income? what is the after-tax value of the major federal child support programs on a per child basis, and how are these benefits distributed across family types and income groups? how many individuals otherwise paying no tax would have to pay tax under various minimum tax systems, and what would additional government revenues be? how much money would be needed to raise all low income families and persons to Statistics Canada's low income cut-offs in 1996? how much would average household "consumable" income rise if a province elminated its gasoline taxes? how much would federal government revenue rise by if there was an increase in the GST rate from 7% to 9%?

Information on net earnings (net pay taken home, in absolute figures) and related tax-benefit rates (in %) complements gross earnings data with respect to disposable earnings. The transition from gross to net earnings requires the deduction of income taxes and employee's social security contributions from the gross amounts and the addition of family allowances, if appropriate.

The amount of these components and therefore the ratio of net to gross earnings depend on the individual situation. A number of different family situations are considered, all referring to an average worker. Differences exist with respect to the number of workers/earners (only in the case of couples), number of dependent children, and level of gross earnings, expressed as a percentage of the gross earnings of an average worker (AW).

All the data are based on a widely acknowledged model developed by the OECD, where figures are obtained from national sources (for further details on data providers, see the national contact list in Annex).

The collection contains, for selected situations, data for the following variables and indicators :
a) gross and net earnings, including the transition components "income taxes", "employee's social security contributions" and "family allowances", if appropriate;
b) tax rate, defined as the income tax on gross wage earnings plus the employee's social security contributions less universal cash benefits, expressed as a percentage of gross wage earnings;
c) tax wedge on labour costs, defined as income tax on gross wage earnings plus the employee's and the employer's social security contributions, expressed as a percentage of the total labour costs of the earner. The total labour costs of the earner are defined as his/her gross earnings plus the employer's social security contributions plus payroll taxes (where applicable). The tax wedge on labour costs structural indicator is available only for single persons without children earning 67% of the AW.
d) unemployment trap, measuring the percentage of gross earnings which is taxed away through higher tax and social security contributions and the withdrawal of unemployment, and other, benefits when an unemployed person returns to employment. This structural indicator is available only for single persons without children earning 67% of the AW when in work.
e) low wage trap, measuring the percentage of gross earnings which is taxed away through the combined effects of income taxes, social security contributions and any withdrawal of benefits when gross earnings increase from 33% to 67% of AW. This structural indicator is available for single persons without children and one-earner couples with two children.

75% of households from the Bangladeshi ethnic group were in the 2 lowest income quintiles (after housing costs were deducted) between April 2021 and March 2024.

We exploit changes in child benefits in Canada to study the impact of family income on child and family well-being. Using variation in child benefits across province, time, and family type, we study outcomes spanning test scores, mental health, physical health, and deprivation measures. The findings suggest that child benefit programs had significant positive effects on test scores, maternal health, and mental health, among other measures. We find strong and interesting differences in the effects of benefits by child sex: benefits have stronger effects on educational outcomes and physical health for boys, and on mental health outcomes for girls. (JEL I12, I31, I38, J13)