Friday, November 22, 2019

The Top 5%

A salary of £80,000 would put someone firmly in the top 5% of UK earners. According to HMRC taxpayer data from 2016-17, the 95th percentile of earnings began at £75,300. If this has gone up in line with other earnings growth, it will be just over £80,000 this year.

Those figures do not include non-taxpayers - once they are included, earnings of £80,000 would put someone in the top 3% of the UK population, according to the Institute of Fiscal Studies.

However, wealth is another matter. This is much harder to calculate, as the richest people tend to distribute their assets around the world. Add in the use of offshore companies by some, and it becomes impossible to know where the boundary lies between the richest 5% and everyone else.
According to the Office for National Statistics (ONS), the top 10% of households by income earn 6.8 times more than those on the lowest rung, but the wealthiest 10% have 290 times more in total assets than those at the bottom of the pile. This could make someone in the top 5% for income feel relatively average in comparison.
The figures show that to be in the wealthiest 5% a household needs to have assets worth £1.7m, including any equity in their home and any pensions that are building up in their name.
Three-quarters of people earning between £20,000 and £29,999 said they would consider someone on £60,500 a year to be rich, this fell to just 27% of those earning more than £50,000 a year.

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