Is income inequality falling?

6 January 2022
What was claimed

Income inequality is falling.

Our verdict

The latest (pre-pandemic) official figures show it was rising or broadly stable. Recent analysis suggests it fell during the pandemic but is rising again following the removal of income support.

“If we look at the statistics, we see that economic inequality is down in this country.”

Boris Johnson, 5 January 2022.

At Prime Minister’s Questions, Boris Johnson claimed economic inequality is falling. However, the data available shows a more complex picture. 

Income inequality is often measured using something known as the Gini coefficient, which measures inequality on a scale from 0% to 100%, where 0% would be a society where everyone earns the same amount, while 100% would be where one person earned everything. 

The Department for Work and Pensions says income inequality was stable between 2018/19 and 2019/20, at 35% before housing costs are taken into account, and 39% after they have been taken into account. However, the department also noted that income inequality has been gradually rising since 2011.

Meanwhile, the most recent data from the Office for National Statistics (ONS), which measures income inequality in a similar way, though using a different survey says: “In the period leading up to financial year ending (FYE) 2020 (April 2019 to March 2020), just before the coronavirus (COVID-19) pandemic, income inequality steadily increased to 36.3%.

“This was the highest reported measure of income inequality over the 10-year period leading up to FYE 2020.”

The ONS added: “The gap between the richest in society and the rest of the population has widened over the 10-year period; the income share of the richest 1% increased from 7% to 8.3% between FYE 2011 and FYE 2020.”

The Equality Trust told Full Fact that there is no conventional measure which shows income inequality falling prior to the pandemic.

As for the trend since the pandemic started, it noted analysis by the Resolution Foundation think tank which estimated that income inequality would fall in 2020/21, as a result of the temporary Universal Credit uplift of £20 per week and support provided via furlough schemes.

However these figures were published in January 2021, before this support was removed. In November 2021, the House of Commons Library said that “the removal of the Universal Credit uplift in October 2021 will therefore increase income inequality.” 

Full Fact contacted the Prime Minister’s office to confirm the source for his claim and will update this piece if we receive a response.

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After we published this fact check, we contacted the Prime Minister to request clarification regarding this claim.

Mr Johnson is yet to respond.

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