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Hills report

Top 1%, the sky’s the limit £1,851,423

A comprehensive report out today charts the divided state of the nation. Harriet Harman calls it an ‘inequality bible’. Here, Tom Clark uses its data to tell you ....

Professional

Still the second sex
Median earnings for woman initially rise like those of men, but after age 30 they start to decline, while men continue to climb the career ladder until well into their forties

Towards pink parity
Civil partnerships were introduced in late 2005, and the pay penalty that men in same-sex couples suffer when compared to “similar” men in straight couples has declined over this time 2003-05

Class divide
It is four decades since an aristocratic John Cleese towered above middle-class Ronnie Barker, who in turn dwarfed the proletarian Ronnie Corbett. But the continuing gulf between the median pay of different classes ensures that each continues to “know its place”

£40,987
£99,360

Race and religion
Families in the white majority are typically twice as rich as those in most minority ethnic groups. And when it comes to religion, huge wealth differences mean followers of some faiths can enjoy a reward on this Earth, while others have to wait for the ever-after £422k Jewish

Home truths
Familiar north-south differences in the cost of a house are reflected in median household wealth

The gap that’s too small
Wealth inequality between the generations is no bad thing – it is what you would expect if the old have saved for retirement. But the two-and-a-half-fold gap in the average net worth of 40- and 60-year olds is far less important than the near 50-fold gap that separates relatively-affluent and relativelyhard-up at age 60

£29,886

Senior finance manager

£90,000

Men

£23,782

£19,955

8.4% less

£150,629
Supervisory or technical
£79,639

Scotland

Old have two-and-a-half times more than young

£416,120

Property value

£2,000,000
8,100-acre Camusrory Estate in the Highlands

£22,452
Routine occupations

Women

£18,188
£15,649
2006-08

Airline pilot

£73,281

White £221k Indian £204k
£69,576

£229k Sikh £223k Christian £206k Hindu

Yorkshire and the Humber

£11,134 £11,256

£172,727

MP

£161k Other religion £138k No religious affiliation

£64,766

Pakistani £97k
£57,928

Black Caribbean £76k Other Asian £50k Black African £21k Bangladeshi £15k

Salaried GP

Age 16-19

£54,548

£42k Muslim Pension alone

20-24

25-29

30-34

35-39

40-44

45-49

50-54

55-59

60-64

65-69

£52,000

£1,293,000
35-44 45-54 55-64
Career police inspector at point of retirement
£1,219,350

£7,800 £8,996 £9,932 £10,556 £11,024 £11,492 £11,804 £12,168 £12,480 £12,792 £13,104 £13,364 £13,624 £13,884 £14,196 £14,456 £14,768 £15,028 £15,288 £15,496 £15,756 £15,964 £16,172 £16,432 £16,640 £16,900 £17,212 £17,420 £17,680 £17,940 £18,200 £18,460 £18,668 £18,928 £19,136 £19,448 £19,708 £19,968 £20,176 £20,540 £20,800 £21,112 £21,424 £21,684 £22,048 £22,360 £22,620 £22,984 £23,296 £23,660 £24,024 £24,388 £24,752 £25,116 £25,428 £25,740 £26,052 £26,468 £26,676 £27,092 £27,508 £27,872 £28,288 £28,756 £29,224 £29,744 £30,264 £30,680 £31,148 £31,616 £31,980 £32,500 £33,072 £33,540 £34,216 £34,840 £35,464 £36,088 £36,816 £37,440 £38,116 £38,948 £39,884 £40,664 £41,652 £42,640 £43,888 £45,032 £46,488 £47,788

Primary teacher

£33,743

Nurse

£29,431

Army corporal

Painter and decorator

£25,882

£22,224

Traffic warden

£20,827

The 100 bars on this chart each represent 1% of full-time wage earners
Fitness Instructor

Hospital porter

£18,348

£15,236

Hairdresser

£12,402

%

5

10

15

20

25

30

35

40

45

50

55

60

65

70

75

80

85

90

95

100

-£3,844 £1,421 £2,388 £2,550 £3,130 £4,503 £6,273 £7,341 £7,765 £8,817 £10,750 £12,871 £14,600 £15,120 £16,312 £18,201 £21,136 £24,305 £25,900 £28,620 £31,800 £35,505 £39,171 £42,717 £46,611 £50,642 £56,321 £61,384 £66,320 £73,452 £79,034 £85,011 £90,964 £97,245 £104,083 £110,339 £117,200 £123,400 £129,655 £135,907 £142,785 £149,365 £155,730 £162,608 £169,710 £176,000 £182,728 £190,319 £197,739 £204,500 £211,500 £218,722 £225,878 £233,673 £241,800 £250,369 £257,971 £267,995 £276,810 £285,918 £294,350 £302,666 £311,997 £321,014 £331,020 £342,026 £353,062 £364,834 £376,448 £389,000 £403,046 £414,553 £427,599 £444,141 £460,519 £474,700 £487,198 £503,330 £522,722 £542,335 £563,486 £584,805 £608,178 £635,200 £668,422 £697,550 £733,266 £768,049 £810,955 £853,099 £899,893 £955,000

The Dutch economist, Jan Pen, proposed visualising the spread of incomes as an hour-long parade through a town, where the height of each individual corresponded to their salary. The first 40 minutes or so would witness a parade of dwarves, since the skewed spread of incomes towards the affluent few ensures that most people are below the average. After that, a fair few people of average stature would pass by, and then a few more who were somewhat on the tall side. But in the last couple of minutes great giants would emerge, and during the last few seconds their heights might be measured in miles.

The chart here shows how Pen’s parade would look in contemporary Britain. Note it is incomplete in two respects, it concentrates solely on people in full-time work, and so disregards the near-half of people who are part-timers, self employed or reliant on benefits, the last group including most of the poorest. And at the very top end, the chart cannot stretch far enough to show the richest people of all. But even with these caveats, the gap recorded is big — with incomes for all of the richest tenth being four times or more those of the poorest. Take the chance to see where you measure up against the giants and the dwarfs

Pharmacist

12%

12.57%
2000

10%

10.03%

Pension alone

£939,000

MP leaving Parliament after 25 years

8%

To see where you fit in, you need to tot your savings (minus your debt) and also your cars, fridges, TVs and the rest. For those lucky enough to own one, you then need to add in the value of your house – after docking off any mortgage still owed to the bank. But even more important, for many people, is the pension pot. On the chart we have placed the value of illustrative pensions for people in various jobs. Even taken on its own, a decent pension pot is often enough to push a man or woman of a certain age well up the distribution. Much of the wealth gap is right at the top, the holdings of the top 1% being more than £2.6m - which is why their bar on the main chart simply soars upward off the page. The figure to the right illustrates how the pay of Britain’s runaway rich was reined in after the War, but once again tore loose from the 1980s. Their newfound income has now translated into extraordinary wealth

6%

10% of families own more than £853,099

Pension alone

4%

£621,000

1976

2%

4.17%

Company manager on £60k, ten years to go

0%

1930s

1940s

1950s

1960s

1970s

1980s

1990s

£189,000

Pension alone

House value

£245,750

Mid-career classroom teacher House value

London average

£169,000

All UK average

Lifetime savings

£5,668

The 100 bars on this chart each represent 1% of households

£16,000

House value

£118,400

Maximum allowed by housing benefit rules

Yorkshire average

%

5

10

15

20

25

30

35

40

45

50

55

60

65

70

75

80

85

90

£1,033,355

£39,807

The wealth parade, as opposed to the income procession, measures all people’s worldly possessions – not just what they have coming in. And as the chart shows, the numbers this time are far bigger – running into millions for the well-to-do – and so is the economic gap. On this measure, every household in the richest tenth has at least 100 times more than the families in the poorest.

Share of total income going to the richest 1% of people 1937

Garden maisonette in Notting Hill

£1,118,559

Income: Pen’s parade of dwarves and giants

90% of full-time employees earn less than £46,488

£49,868

The wealth parade

How the rich were reined in - then broke free

House value

£1,100,000

95

£1,365,273

£55,790

£287,892

South East

£1,549,649

1.5% less

£62,764

£187,664

West Midlands

£174,876

£287,801

Poorest

Richest

Poorest

SOURCES: NATIONAL EQUALITY PANEL, ONS, LFS, OECD, LONDON SCHOOL OF ECONOMICS, HALIFAX. PENSION ESTIMATES: JETHRO GREEN. ADDITIONAL ANALYSIS: SIMON ROGERS. GRAPHIC: PAUL SCRUTON, MICHAEL ROBINSON

Richest

£2,574,327
100

What you get...

Stephen Hester Chief executive of RBS Basic salary

Top 1%, the sky’s the limit

£1.2m

... and what you’re worth

Pension alone

£16 million
Fred Goodwin former boss of RBS