UK income inequality on the rise

The pay gap between the highest and lowest earners in the UK has grown more quickly than in any other high-income country since 1975, a report said Monday.Research by the Organisation for Economic Co-operation and Development (OECD) found the sharp increase in income inequality, which began in 2005, leaves Britain well above the group's average, the media here reported.The study - "Divided We Stand: Why Inequality Keeps Rising" - published by the forum of 34 countries that earn the most, said the annual average income of the top 10 percent was almost 55,000 sterling pounds in 2008, nearly 12 times higher than that of the bottom 10 percent, who earned an average of 4, 700 pounds.This is up from a ratio of 8 to 1 in 1985, the OECD said.Data showed the money earned by the country's top 1 percent of earners doubled from 7.1 percent of the total UK income in 1970 to 14.3 percent in 2005.Just prior to the global recession, the top 0.1 percent of top earners accounted for 5 percent of total pre-tax income.At the same time, the top marginal income tax rate saw a marked decline, dropping from 60 percent in the 1980s to 40 percent in the 2000s, before its recent increase to 50 percent.In order to combat the problem, the OECD said: "Work is the most promising way of tackling inequality."The biggest challenge is creating more and better jobs that offer good career prospects and a real chance to people to escape poverty." It said investing in "human capital" is vital.