This graph shows measures of household income adjusted for inflation
to be in 2014-15 prices.

In 2014-15, the median income was £24,900, which means that half of households had more than this income, and half had less. In a similar way we can talk of deciles so that 30% of households have an income below the 3

In 2014-15, the median income was £24,900, which means that half of households had more than this income, and half had less. In a similar way we can talk of deciles so that 30% of households have an income below the 3

^{rd}decile and 70% below the 7^{th}decile. The data is drawn from annual surveys and adjusted according to the make-up of individual houses (a process called equivalisation).
Incomes
rose in real terms until 2009-10. Compared to 1994-95 values, the 3

^{rd}decile increased by 47%, the median by 41% and the 7^{th}decile by 40%. Although these percentages appear to suggest that inequality lessened over this time, it is also true that inequality increased in absolute terms with the gap between the 7^{th}decile and 3^{rd}decile widening from £10,600 in 1994-95 to £14,000 in 2009-10. Income inequality has decreased slightly since the pre-recession peak with the 3^{rd}decile rising by 1% and the 7^{th}decile falling by 1%.
These data include the effects of taxation and benefits. Both serve to considerably reduce income inequality. Even without digging into the numbers this can be appreciated from the fact that those above the 7

^{th}decile pay tax at a rate of 40% (or more) on any increase in income, whereas much of the income for those below the 3^{rd}decile comes from state benefits.
The effect of housing costs on inequality is not included here but can be appreciated in this data showing how poverty varies across UK regions and countries.

Statistics on wealth
inequality are much more uncertain because there are few wealth
taxes, and this is also the main reason why wealth inequality is much larger than
income inequality.

**References**

These data are taken from the Scottish Government publication Poverty and Income Inequality in Scotland 2014/15 (Table A10) which draws on the UK Department of Work & Pensions Households Below Average Income (HBAI) analysis of the Family Resources Survey.

*This graph was published in A Nation Changed? The SNP and Scotland ten years on. A book with contributions from various authors edited by Gerry Hassan and Simon Barrow.*
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