Income deciles show the average income for different income groups in society.
A decile splits the population (by households) into 10 equal parts.
Assuming there are 26 million households in the UK (2013/14)
- The bottom decile is the 2.6 million households with lowest income.
- The 2nd decile is the 2.6 million households in the next 10-20% of household income
- The top decile is the 2.6 million households with the top 10% of household income
Source: ONS – average incomes, table 14, June 2015
To go from original income to final income
- Cash Benefits – income support, tax credits, pensions, housing benefits, unemployment benefits.
- Benefits in kind – education, health care, bus travel,
- Direct taxes – income tax, national insurance
- Indirect taxes – VAT, Excise duty.
For example, if we just take original income
- Bottom decile = £3,737
- Top decile £102,366
After taxes, benefits and benefits in kind:
- Bottom decile = £ 12,050
- Top decile = £ 73,682