The richest 1% in Britain have become increasingly concentrated in London over the past two decades, according to research by the Institute for Fiscal Studies that underlines the rise of inequality between the capital and the rest of the country.
London had increased the proportion of top 1% highest income tax payers who live there by a fifth since the early 2000s, marking a growing concentration of income.
Finding that the top 1% highest earners in the country are overwhelmingly middle-aged men living in London and the south-east, the thintank said the super-rich bunching together could distort their views on wealth.
London’s share of the top 1% had risen to 35% in 2014-15 from 29% in 2000-01.
More than half of the country’s top 1% live in London and the south-east, clustering together in as few as 65 parliamentary constituencies, compared with 78 at the start of the 2000s. It took an income of about £100,000 to be considered among the top 1% of high earners in Wales, the north-east and Northern Ireland. However, in London it was more than £300,000 a year. A 50-year-old man in London with an income of £160,000 would earn enough to be in the top 1% for the rest of the country, but would not even be in the top 5% of men living in London. Men make up 83% of the top 1% of income tax payers and 89% of the top 0.1%. To be among the top 1% of men requires an income of £200,000, while to be in the highest 1% income bracket for women would need half of that.
Robert Joyce, deputy director at the IFS, said: “This geographic and demographic concentration may be one reason why many of those on high incomes don’t realise quite how much higher their incomes are than the average.”