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Disposable incomes rise for richest fifth households only

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Disposable income fell for all but the richest fifth of UK households from 2011-12 to 2012-13, official figures reveal.

According to the Office for National Statistics (ONS), there was a slight increase in income inequality between 2011-12 and 2012-13 as disposable income for the poorest fifth of households fell from £11,503 to £11,122 while for the richest fifth it grew from £58,109 to £59,049.

Disposable income for second, third and fourth quartile households fell by an average of £212.

Before taxes and benefits the richest fifth of households had an average income of £81,300, almost 15 times greater than the £5,500 average income of the poorest fifth.

Frances O’Grady, secretary of the Trade Union Congress (TUC), said: “The gap between rich and poor is growing again after a brief post-crash pause. Last year the richest households got richer, while everyone else got poorer. This is further proof that most people are failing to have a fair share in the benefits of recovery.”

Cash benefits made up 56.4 per cent of the gross income of the poorest fifth of households (£7,200), compared with 3.2 per cent (£2,700) of the income of the richest fifth. The richest households paid 35.1 per cent of their gross income in taxes, while the poorest paid 37.4 per cent.

O’Grady said: “The return of rising inequality should worry everyone as it suggests that nothing has been learned from the financial crisis despite the huge fall in living standards that so many people are still experiencing.”

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