LONDON, May 30 (Xinhua) -- The ratio of average household income of the richest one-fifth of people before taxes and benefits compared with the poorest one-fifth in Britain was 11.2 in the financial year ending 2018, continuing the downward trend from 15.5 in 2008, statistics revealed on Thursday.
Before taxes and benefits, the richest one-fifth of people had an average household income of 88,200 pounds while that of the poorest fifth stood at 7,900 pounds, according to the Office for National Statistics (ONS).
But ONS said that overall, taxes and benefits have led to income being shared more equally. After all taxes and benefits are considered, the ratio between the average household income of the richest and poorest fifth of people of 65,500 pounds and 18,900 pounds respectively, is reduced to less than 4.
Cash benefits were most effective at reducing income inequality, although their effect has diminished over the past seven years, which partly reflects the fall in their value relative to incomes before taxes and benefits, the ONS said.
Direct taxes like income tax are progressive in reducing income inequality, with the richest one-fifth paying 30.9 percent of their income in direct taxation, compared with 14.7 percent for the poorest one-fifth of people, it said.
The poorest one-fifth of people live in households that received relatively large amounts of both cash benefits and benefits-in-kind and were net recipients in the financial year ending 2018, it found, adding that richer households, on the other hand, paid more in taxes and received less in benefits, were net contributors. (One pound = 1.26 U.S. dollars)
