Flat-lining or seething beneath the surface? Two decades of changing economic inequality in the UK *

The United Kingdom is well known as one of the more economically unequal industrialised countries. It is commonly perceived that inequalities have increased in recent years. This chapter focuses on the 20 years after 1995-96. Wages are only one component of household income. One reason why income inequality narrowed immediately after the crisis was that policy at that stage continued to maintain the real value of the most important social security benefits. The chapter describes the trends in overall inequality shown by the data, and the sharp contrasts between the two decades. It examines the most pervasive change that younger adults lost ground to older ones. The chapter then explores what happened to the better- and less well-off within groups defined by family type, region, tenure, ethnicity, and disability status to see which, if any, were ‘left behind’.