Income Redistribution

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  • Created by: lydia
  • Created on: 11-04-14 10:13

Income and Wealth

  • Income is a flow of factor incomes such as wages and earnings from work; rent from the ownership of land and interest & dividends from savings and the ownership of shares
  • Wealth is a stock of financial and real assets such as property, savings in bank and building society accounts, ownership of land and rights to private pensions, equities, bonds etc
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Types of Poverty

Relative poverty measures the extent to which a household’s financial resources falls below an average income level.

  • Although living standards and real incomes have grown because of higher employment and sustained economic growth, there is little doubt that Britain has become a more unequal society over the last 20-25 years.

Absolute poverty measures the number of people living below a certain income threshold or the number of households unable to afford certain basic goods and services.

  • What we choose to include in a basic acceptable standard of living is naturally open to discussion.
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Types of income

  • Disposbale income: how income is shared out between households in a country.
  • Real disposbale income: income after taxes on income have been deducted and state benefits have beeen added and the result has beeen adjusted to take into account changes in the price level.
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Goverment actions

  • The introduction of a National Minimum wage and a series of increases in its value
  • Tax Credits  to boost work incentives for low-income households who choose to work
  • Minimum Income Guarantees for Pensioners and increases in the real value of Winter Fuel Payments.
  • Active employment policies for young people, the long-term unemployed, lone parents and disabled people – a long-term strategy designed to increase employment opportunities
  • Increased spending on training
  • Increased spending on early-years education
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