Distribution of Wealth, Poverty, and Income in the UK

Why is it seen as a normal part of first-world life when we pass by a homeless person outside a busy, commercial area such as a shopping complex? You would think that living in a rich country such as the UK would prevent such problems, but unfortunately, this is not the case.

Following this, we will consider social inequality and wealth and income distribution in the UK by analysing some statistics and sociological theories on the issue.

• We will start by understanding wealth distribution in the UK.
• We will discuss the UK income distribution curve and the UK wealth distribution graph.
• Then, we will move on to what social inequality looks like in the UK.
• Finally, we will look at the causes of wealth inequality in the UK over time.

Wealth distribution in the UK

Issues with statistics on wealth distribution

While official, nationwide statistics can provide a good overall picture of the distribution of income and wealth in society, some sociologists warn that this data is not always definitive. This is because it is collected by the state and hence may be manipulated to make the situation look better than it actually is, as claimed by Peter Townsend (1979).

It is argued that to properly understand the extent of poverty and what income inequality looks like in practice, one needs to study qualitative data. This can include documentaries and case studies on the conditions of both the wealthy and the poor.

Social inequality in the UK

When we study the distribution of income and wealth, we can tell that it isn't random - there are patterns that arise within it.

Jan Flaherty et al. (2004) observe that some social groups are more likely to experience poverty than others both in the UK and in Europe. They look at how and why certain factors affect patterns of income and wealth distribution, including:

• social class
• gender
• ethnicity
• age
• family status
• disability

Social class and social inequality

Although social class categories are defined by cultural/social elements and living standards as well as financial status, wealth inequalities are closely connected to the distinctions between social classes.

People from different classes have different opportunities available to them. Working-class people are less likely to have higher educational qualifications, and they have much less capacity to engage in cultural leisure activities.

As a result, they often only find low-skilled, low-paid employment. People from this background are also more likely to live in low-income households or in deprivation than the middle and upper classes.

The New Right blames working-class and poor individuals for their situations. New Right thinkers like Charles Murray (2012) believe these people tip themselves into poverty by being too lazy to work, and choosing to depend on benefits.

Sociologists with conflict theory perspectives, however, point out that the system is discriminatory towards the working-class from the very beginning. Working-class people have much worse life chances regardless of their individual ambitions, motivation, and work ethics, and are basically set up to fail.

Max Weber argued that the elimination of class differences and differences in status can lead to the end of poverty.

Gender and social inequality

Women experience poverty in higher numbers and in more extreme ways than men within the same social class, ethnic, or age group (Ruspini, 2000).

The most obvious reason for this is the gender pay gap. Women still earn less than men on average, especially when it comes to hourly wages. In the UK, men of almost all ethnic minority groups had a higher hourly wage than women of the same ethnicity in 2019. The only exceptions were Bangladeshi, Black Caribbean, and Arab women, who earned more on average than their male counterparts.

Another reason for the emerging feminisation of poverty is that women suffer more from family issues e.g. domestic violence, claims Pete Alcock (1997). For their own and their children's survival and well-being, women often have to leave their partners and cope as lone-parent families with little or no support. Lone-parent families are more likely to have lower incomes and experience poverty on average.

Ruth Lister (2003) argues that social policies and a change in societal attitudes towards gender roles can bring about changes in childcare and women's labour. This will help eliminate poverty among women. She believes this can be done if:

• Lone mothers have more opportunities to resume work after their children reach school-age.
• Governments enforce policies that enable fathers to take part in childcare.

Ethnicity and social inequality

Poverty rates are much higher for ethnic minorities than for white people in many Western countries (Lin and Harris, 2008). In the UK, minority groups are generally poorer than the majority of the white British population (JRF). Both men and women from some ethnic groups earn less than people of other groups who possess the same qualifications.

Statistics show that in the UK, Bangladeshi and Pakistani workers are the most likely to suffer from in-work poverty. Chinese, Indian, and White workers are the least likely to suffer from deprivation. People of Chinese origin are the most likely minority ethnic group to be in the wealthiest 10 percent of the UK population.

Age and social inequality

The median income for people in retired households dropped by an average of 1.1 percent between FYE 2018 and FYE 2020 (ONS).

Wealth owned by households where the head was aged from 55 years to under State Pension age was 25 times higher than the youngest households (aged 16 -24 years), as measured by the median (ONS).

The 35-44 age group is almost three times wealthier than the 25-34 age group.

Childhood poverty

Childhood poverty is one of the most serious issues society can face. Oscar Lewis (1959) claimed that children are ‘robbed of their childhood’ by deprivation.

• Guy Palmer et al. (2003) produced research on child poverty rates in the UK, showing how children experience social exclusion due to poverty in many areas of life, like education and cultural activities.

• The Nuffield Foundation’s research showed that 31 percent of children in the UK lived in relative poverty in 2021. JRF statistics highlight that this is exacerbated for children of Pakistani, Bangladeshi, and Black descent, and for children with foreign-born parents.

• The highest rate of child poverty is among single-parent families, at 60 percent.

• Stress caused by poverty can affect the development and cognitive abilities of children, resulting in serious negative consequences on their behaviour and learning potential (Duncan and Magnusson, 2011).
• As a result, poor children are less likely to succeed academically and get high-paid jobs, and more likely to engage in crime or become teenage parents. It becomes difficult for them to escape poverty in their adult lives (Howard and Garnham, 2001).

Family structure and poverty

According to the JRF, 55 percent of people in working families experience poverty, which is a record high. Around 80 percent of these people are employed, while the remainder cannot work due to childcare duties.

Lone-parent families are more likely to suffer from poverty. In 2019/20, around 43.3 percent of lone parents had lower than MIS incomes even while in full-time employment, while 80 percent of lone parents working part-time or in self-employment earned less than MIS.

Fig. 3 - Single parent families are more likely to be in poverty.

Families with one parent and children suffer from the lowest food security status. Pensioners are the least likely among the poor to suffer from low food security status.

Disability

Disabled people are more likely to suffer from deprivation, and people in poverty are more likely to suffer from physical and mental illnesses.