Household income doubles despite dip

Ben Southwood
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THE INCOMES of the middle fifth of earners were nearly double as high in 2010-11 than in 1977, figures showed yesterday, in spite of the deep ongoing recession.

The middle fifth earned an average of £24,400 per household in 2010-11, the Office for National Statistics (ONS) said, up 1.7 per cent on average in real terms each year since 1977, when average household earnings were only £13,800.

And despite massive hikes in state spending, households also faced a lighter tax burden, with 19.2 per cent of their incomes taken in direct taxes, such as income tax, down from 23.5 per cent, and 15 per cent taken in indirect taxes, such as VAT, down from 16.3 per cent.

Homeownership among the middle fifth of households went up from 51 per cent to 65 per cent, the ONS numbers also revealed.

But the ONS warned that the economic downturn has driven the group’s disposable incomes down 8.8 per cent since the onset of the recession – though this came down to 3.8 per cent after taking into account tax and benefit changes.