Thursday, October 25, 2012

Yet more data about retirement income - ONS report

I am not sure what the marketing value is of this ONS analysis but I find it very interesting. Thought I should tell you about it.

Once again, a few words of thanks to the ONS for producing these easy to follow videos.

You can download the complete report + Excel spreadsheets here.

The thing that really fascinated me was this graph that showed the change in the average value of the  income of the lowest and highest 25% of older households.

This analysis implies that the maximum difference between the rich and poor older person was around 1990 and since then the gap has closed.

This goes against my instinct of what is happening.

What the ONS has done is to use the average income of each of the quintiles. What I think they should have done was use the median income. This is not some statistical gripe - it is important. My bet is that the variation between the median and mean incomes has increased over time. This would mean that although the mean of the top 25% is £30,000 the median is likely to be less. This would mean that you have a small group - probably 15% or so - with household incomes that are much higher.

If anybody from the ONS reads this perhaps they would like to comment. Dick Stroud

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