Recent figures have suggested that the ‘middle fifth’ of households in the UK pay less tax, own more properties and are wealthier than they were 35 years ago.
The Office of National Statistics found that those households classed as the ‘modern middle’ had an inflation-adjusted disposable income of £24,400 in 2011, compared to £13,800 in 1977. This group also pay less tax than they did in the 70s and two-thirds now own their own home, compared to just over half 35 years ago.
Personal tax allowance increases have contributed to a reduction in the amount the middle fifth now pay in tax, which for direct taxes (income tax, council tax) stood at 19.2 per cent of gross income in 2010/11, compared to 23.5 per cent in 1977.
Despite this positive news, incomes of the middle class have still fallen since the recession hit. On average people in this bracket earn more than £3000 less than they did before the financial crash. A fall of almost nine per cent in earnings occurred between 2007-2008 and 2010-2011 for middle income earners, taking the average salary to £33,200 down from £36,400.
These latest statistics come from a survey carried out by the ONS which focused on households halfway between the UK’s poorest and richest.
The survey showed a sign of Britain’s ageing population by highlighting the fact that 31 percent of the ‘median households’ surveyed consisted of retired people. This figure was only 9% in 1977.