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Income distribution

Proportion of total net and gross income before housing costs held in each decile (2021/22)

Those in the bottom five deciles of the net income distribution in London together take home less than a quarter (23.9%) of London’s total net income before housing costs. Those in the top decile of London households alone take home 32.2% of total net income.

The impact of redistribution through the tax and benefit system can also be seen in this chart. The top decile holds a lower proportion of total net income (32.2%) i.e. after tax, than it does of gross income (37%) i.e. before tax. In contrast, the bottom decile of London households holds 1.5% of total gross income but 1.9% of total net income. This reflects the higher tax rates paid on incomes in the for the 9th and 10th deciles, and at the other end the effect of the personal tax allowance threshold which means the income earned up to a given point is not taxed at all.

Compared to London, the top decile in the rest of England holds a lower proportion of total net (27.6%) and gross income (31.4%). Those in the bottom decile in the rest of England, in both total net and gross income, hold a larger proportion than in London (2.6% and 2.4%, respectively).