ONS reveals further woes for UK households
Household income has continued to decline, with some of the poorest being hit by VAT and duties on alcohol and fuel, a report by the Office for National Statistics has revealed.
The report showed that the financial squeeze on British households continued with households paying more in taxes and prices.
This saw £7500 being paid a year in direct taxes, such as income tax and council tax. According to ONS, the richest fifth paid 24 per cent of their gross income - £19,700 - while the poorest fifth paid 10 per cent of their gross household income, at £1300.
The lowest income groups were particularly hit by paying a higher share of their income in indirect taxes, such as VAT and duties on alcohol and fuel.
The poorest fifth were hit the hardest with indirect taxes, with an increase from 28 per cent to 31 per cent. The richest fifth saw in increase from 12 per cent to 13 per cent in indirect taxes, the ONS found.
The average disposable household fell by around £200, in real terms, between 2009/10 and 2010/11.
The largest fall was for the middle fifth of households, with disposable incomes decreasing by 4.3 per cent, from £25,500 to £24,400 – resulting from a decrease in income.
Looking at cash benefits, such as tax credits, housing benefit and income support, the ONS found that these were higher for poorer households than for richer households.
The largest cash benefits were received by households in the second quintile group - £8300 on average, compared with £7000 for households in the bottom group.
The ONS stated that this was largely because more retired households are located in the seconds quintile group and the state pension is classified as a cash benefit.