CACI Report Reveals UK Wealth Distribution

CALL 020 7602 6000 WEB CACI.CO.UK TWITTER @ CACI_DATA
WEALTH OF THE NATION 2016
A Study of Household Income
in Great Britain

2
WEB CACI.CO.UK © CACI 2016The data, mapping and results included in this document shall be used solely for
personal, academic and/or non-commercial purposes
Patrick has overall responsibility for the project delivery and development of CACI’s Location Planning Team as well
as software delivery through the InSite Solutions Group. His role involves team and project management, support for
the business development team and both pre and post sales client consultancy and advice. Patrick also sits on the New
Product Development board and is responsible for driving forward future CACI advancements ensuring that we remain
at the forefront of demographic and lifestyle segmentations and data. Patrick has been widely quoted in national press
and broadcast media. He also presents papers at a wide range of conferences and provides commentary to sector
specific journals.
Jamie has ten years’ experience in modelling consumer behaviour and characteristics with a background in statistics and
econometrics. In recent years he has focussed on the retail banking sector and worked with the majority of high street
brands and some of the biggest insurers. Jamie has worked with the BBA on a report identifying vulnerable consumers,
and how advances in technology affect their access to financial services. More recently he worked alongside the Money
Advice Service to identify and forecast level of over-indebtedness across the United Kingdom.
ABOUT THE AUTHORS
PATRICK TATE
Director of Location Strategy & Analytics
ptate@caci.co.uk
020 7605 6186
JAMIE MORAWIEC
Associate Partner
jmorawiec@caci.co.uk
020 7605 6035

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1.1 INTRODUCTION
Household income and wealth are frequently the subject of newspaper headlines – perhaps unsurprising given they are
seen as the economic driving force of almost all aspects of life in Great Britain.
Public service providers, retailers, restauranteurs, bar owners, bankers, house builders – indeed any business that has a
consumer at its heart – needs to know the incomes of their customers in order to price or position their products and
services appropriately against the competition, whilst protecting their margin or achieving value for money.
So understanding the income figures alone is certainly useful, but overlay that with postcode level demographic data
and you can significantly enrich the quality of income data. Which in turn will help create some truly insight-driven
marketing campaigns.
Using a suite of data products created by CACI’s Data Lab – most notably Acorn, Paycheck and Ocean – CACI can
give you invaluable insights on the lifestyles and opportunities that exist within neighbourhoods, and how they can be
directly attributed to its income.
If you’re a commercial business, just some of the ways you could use this data would be to:
• Inform how you grade your price points
• Understand where the high earners are in your catchment
• Find out which of your existing customers can afford to spend more with you
And if you’re a public service provider, you might want to know the answers to some important questions such as:
• Who in your area is likely to need support?
• Is proposed housing affordable for local residents?
• Are debt management and advice resources targeted to the right neighbourhoods?
We hope you find this report valuable. If you would like any help understanding how you might apply the findings to
your organisation, please get in touch.
Patrick Tate
020 7605 6186
ptate@caci.co.uk

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1.2 HOW CACI’S DATA LAB HELPS UNCOVER THE WEALTH OF THE NATION
At its core, the Wealth of the Nation findings are based on a number of the key propriety data products created by
CACI’s Data Lab:
Paycheck provides gross household income estimates at full postcode level across the UK. It uses
information from CACI’s lifestyle database, in conjunction with data from the ONS’s Average
paycheck
Weekly Earnings and Living Costs & Food Survey to build a consistent and statistically reliable model. Income reflected
by Paycheck is gross household income from all sources including earnings, benefits and investments.
The 2016 version of Paycheck provides estimates of gross household income, including additional information which
allows us to study households at various life stages (young singles and couples, families, empty nesters and retired), right
down to the individual postcode level (e.g. W14 8TR). With this level of detail, planners and analysts are able to see
the underlying, regional variations in income patterns as well as local differences and so produce a true picture of the
nation’s wealth.
attitudinal characteristics. Built from over one billion separate pieces of information and updated quarterly, Ocean
forms a complete and current picture of the UK population. This rich data source allows organisations to better target
consumers with the right message, product or service – at the right time and across the right channel.
The variables held within Ocean cover a huge range of categories, of which many are particularly relevant to the Wealth
of the Nation. There are variables to capture individuals’ savings and investment products; their credit card expenditure
and whether balances are paid in full each month; how confident individuals are at managing their own money; and how
likely price comparison sites are used.
In order to identify those at the top end of the wealth scale, CACI has made it incredible easy. Ocean Affluence
is a segmentation that targets and classifies the most prosperous individuals. By combining information on savings,
investments, property and income, the population is separated into seven segments, where the top segment contains
the most affluent 1% of the UK – we call these High Net Worth, and these super-rich individuals are discussed
in this report.
Segmentation is just one of the many applications of Ocean. The database is also invaluable in modelling applications,
because of both its level of granularity and broad range of variables. CACI and the Money Advice Service recently
worked together to model “over-indebtedness” – the extent to which individuals struggle to meet financial
commitments. Sixteen Ocean variables (household income and levels of savings included) were used to produce
estimates of over-indebtedness for every Local Authority in the country. The results and insight have since been
published by Money Advice Service, but top-level findings are highlighted in this report. You can read the Money Advice
Service report here: http://bit.ly/2gxDTS2
define and deliver appropriate targeting strategies. Acorn segments households, postcodes and neighbourhoods into 6
categories, 18 groups and 62 types. By analysing significant social factors and population behaviour, it provides precise
information and an in-depth understanding of different types of people.
We take each of these products and combine the insights they provide in a truly unique way to understand the income,
wealth and affluence of the UK and how it impacts lifestyles and housing affordability.
Ocean is CACI’s database containing the names and addresses of over 48 million UK adults, each
with over 650 variables attributed to them describing their demographic, digital, lifestyle and
Acorn is a geodemographic segmentation of the UK’s population. It provides a detailed
understanding of the consumer characteristics of people and places, allowing organisations to

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1
http://bit.ly/2gxDTS2
For the purposes of this report we look at average household income by broader geographic areas: Postcode Sectors
(e.g. W14 8), Postcode Areas (e.g. W) and Local Authorities Districts / Unitary Authorities. We have identified local
concentrations of wealth and hardship by ranking neighbourhoods with the highest proportion of high and low earners.
The report focuses on the spatial variation in the average income of the GB population rather than seeking to identify
the locations of the super-rich or extremely deprived.
Our heritage and deep expertise in data means are we are uniquely able to combine Paycheck with other indicators
to give a richer picture beyond simply high and low income. In this report we also consider lifestyle and housing
affordability and are delighted for the first time that we are able to incorporate our work with the Money Advice
Advice Service on indebtedness1
which helps to understand the specific financial and advice needs of consumers
across the country.

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2.0 TOTAL INCOME
2.1 GREAT BRITAIN
The mean average household income in Great Britain is £37,300 (ONS’ current average weekly earnings is £499 per
person aged 16-64). The median household income level is approximately £29,400.
According to the definition of the target low income group in the Child Poverty Act 2010, households with an
income less than 60% of the national median are living below the statutory poverty line. This means that almost 7.8m
households (29% of Great Britain) have an income which is less than the government’s own threshold of poverty.
Conversely, 4.5% (1.2m households) have an annual income of over £100,000.
2.2. HIGH INCOME
Whilst the government are still in the midst of their austerity programme and predicting that further savings are
needed, there is a constant argument that the cuts affect the poorest most deeply whilst the wealthiest will not see any
effect to their lifestyle. It is interesting to see that the postcode sector with the highest average income (SW11 6) is not
in what would be traditionally seen as one of the most affluent areas (e.g. Knightsbridge, Belgravia & Chelsea), but in an
area of Battersea which is to the south west of central London. This is because the most wealthy residents of central
London tend to live in metropolitan areas, often in proximity to relatively deprived neighbourhoods. Whereas SW11 6,
with its average household income of £73,300, is in an exclusively wealthy area where a 3-4 bedroom terraced home
can costs over £1.5m.
Whilst the number of millionaires is reported to have increased by over 40% in the past five years2
, there are still less
than 0.1% of households with an income of greater than £200,000 per year. This highlights the difference between
income and wealth, those people who have been classified as millionaires will almost always have been so due to assets
such as property and other investments.
2.3. LOW INCOME
The lowest incomes can be found in Birmingham, Middlesbrough and Birkenhead where average household incomes
are as low as £13,200; almost a third of the national average.
The distribution of income between the top 10 highest income sectors and the lowest is marked when placed on the
same chart (see overleaf).
Areas that are not traditionally perceived as deprived can be found in the lower ends of the income scales because of
the composition of their population. Areas that are popular with pensioners tend to exhibit lower incomes due to the
nature of pension payments.
For example, in West Somerset in the South West almost 33% of the population are aged over 65. This compares to
the GB average of 18%. House prices average around £250,000 (GB average is £265k) with mean household income
is £31,300 , even though less than 20% of households have an income lower than £20,000 compared to 34% of GB.
Our lifestage analysis tells us that the retired3
population enjoy an income of around £24,400, compared to the national
average of £25.9k.
2.4. INCOME DISTRIBUTION
2
http://bit.ly/1UMTQfI
3
Head of household aged 50+ and not working with no children in the household

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0-5
5-10
10-15
15-20
20-25
25-30
30-35
35-40
40-45
45-50
50-55
55-60
60-65
65-70
70-75
75-80
80-85
85-90
90-95
95-100
100-120
120-140
140-160
160-180
180-200
200+
1200
1000
800
600
400
200
0
Index(GBAve=100)
Income Band (£’000)
High Income
Low Income
The traditional North-South divide is slowly eroding
and being replaced by more localised disparities.
Map 1 illustrates the “creep” of wealth up through
the Midlands and into areas of Scotland. It’s clear that
the concentration of high incomes is focussed toward
London and the South East, but more areas outside of
these usual hot-spots are appearing.
Interestingly, within the top 100 postcode sectors in
Great Britain, 24 are outside London and the South
East including 5 which are in Scotland.
Map 1: Mean Household Income
Map 2: Income disparity between highest and lowest income postcode sectors within Local Authority
areas
© CACI Ltd
The data, mapping and results included in this document shall be used solely for personal, academic and/or non-com
1
Map 2: Income disparity between highest and lowest income postcode secto
areas
© CACI Ltd
The data, mapping and results included in this document shall be used solely for personal, academic and/or non-commercial purposes
1
areas
The difference in incomes at a local level is quite stark
when looking at extreme wealth and acute poverty.
In the Wirral, for example, the wealthiest postcode
sector has an average household income of £69,800,
whereas the most deprived is £13,900; a fivefold
difference. Similarly in Birmingham there is a threefold
difference between the highest and lowest income
postcode sectors.
© CACI Ltd
1
areas
n-commercial purposes
ectors within Local Authority
Map 2: Income disparity between highest and lowest
income postcode sectors within Local Authority areas

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Using income as a weighting, we can see how the balance of wealth moves across the country. These “Wealth
Weighted Centres” give an indication of the geographical bias of income.
Between 2000 and 2005 the weighted centre moved approximately 2.3 miles south, but in 2010 the movement north
and west showed a shift in incomes away from the capital. In 2016 this movement has somewhat reversed to settle not
too far away from the 2000 mark.
Map 3: Weighted Wealth Centres
© CACI Ltd
1
Map 2: Top 10 Local Authorities
St Albans
£58,300
Chiltern
£58,400
Elmbridge
£61,000
Wokingham
£58,900
Hart
£58,900
Surrey Heath
£58,400
MoleValley
£55,400
South Bucks
£57,100
Windsor and Maidenhead
£56,100
Richmond upon Thames
£61,200

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3.0 INCOME BY GEOGRAPHIC AREA
3.1. LOCAL AUTHORITY DISTRICT/UNITARY AUTHORITY
The dominance of the London commuter belt in the top ten Local Authority Districts is unsurprising. All of these areas
are well known as being the home of highly paid executives utilising the excellent transport links into central London.
Almost 15% of households in these 10 areas have an income of over £100,000. This compares to the GB figure of 4.5%.
Table 1: Top 10 Local Authority Areas Mean Household Income
Rank Area Name
Total
Households
All
Singles &
Couples:
18-34 - No
Children
Families:
Children in
Household
Empty
Nesters: No
Children in
Household
Retired: No
Children in
Household
1 Richmond upon Thames 84,636 £61,200 £55,500 £50,900 £59,700 £47,900
2 Elmbridge 54,292 £61,000 £51,300 £48,900 £56,500 £48,900
3= Hart 37,029 £58,900 £48,900 £46,000 £53,600 £43,100
3= Wokingham 64,035 £58,900 £49,700 £47,300 £54,400 £43,400
5= Chiltern 38,000 £58,400 £47,900 £45,300 £53,500 £47,000
5= Surrey Heath 35,023 £58,400 £48,100 £46,000 £54,500 £45,200
7 St Albans 59,255 £58,300 £50,300 £46,000 £54,000 £44,200
8 South Bucks 27,934 £57,100 £49,000 £45,300 £52,900 £45,000
9 Windsor and Maidenhead 61,210 £56,100 £50,200 £45,300 £54,200 £43,300
10 Mole Valley 37,119 £55,400 £47,100 £41,000 £53,600 £44,800
(Note: “Children” refers to dependent children aged up to 18)
Map 4: Top 10 Local Authorities by Mean Household Income
© CACI Ltd
1
Map 2: Top 10 Local Authorities
St Albans
£58,300
Chiltern
£58,400
Elmbridge
£61,000
Wokingham
£58,900
Hart
£58,900
Surrey Heath
£58,400
MoleValley
£55,400
South Bucks
£57,100
Windsor and Maidenhead
£56,100
Richmond upon Thames
£61,200

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3.2. POSTCODE AREAS
Postcode Areas4
form 121 large geographic regions, covering on average 200,000 households. At this level of detail
large variations in regional incomes become apparent.
London and the South East dominate the top ten ranking for mean household income. Kingston-upon-Thames tops the
ranking, but London EC, which topped the list in 2012, has now fallen out of the top 10. It’s been replaced by Redhill in
Surrey with Hemel Hempstead also making a return to the top 10.
4
Postcode Areas include areas other than the town or city in their postal name. For example, HP includes Aylesbury, Hemel Hempstead and High
Wycombe as well as a number of other towns and villages.
Table 2 Bottom 10 Local Authorities Mean Household Income
Rank Area Name
Total
Households
All
Singles &
Couples:
18-34 - No
Children
Families:
Children in
Household
Empty
Nesters: No
Children in
Household
Retired: No
Children in
Household
1 Blaenau Gwent 30,645 £24,200 £24,900 £22,100 £26,500 £18,500
2 Kingston upon Hull 115,255 £25,500 £27,300 £23,000 £29,900 £17,800
3 Sandwell 127,553 £25,800 £25,100 £22,300 £27,500 £18,000
4 Nottingham 131,261 £26,000 £27,500 £22,400 £31,100 £19,600
5 Stoke-on-Trent 109,362 £26,100 £25,700 £22,900 £28,600 £19,000
6 Strabane 15,472 £26,200 £25,900 £22,900 £27,200 £19,100
7 Merthyr Tydfil 24,651 £26,300 £26,100 £23,600 £28,600 £19,900
8 Blackpool 64,057 £26,800 £29,600 £25,500 £31,400 £22,100
9 Knowsley 63,058 £27,000 £27,400 £24,300 £29,000 £18,900
10 Liverpool 215,777 £27,300 £29,800 £24,900 £33,000 £20,600
The opposite is true for the bottom 10 Local Authorities where over 50% of households have less than a £20,000
income compared to 34% of Great Britain.

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Table 3: Top 10 Postcode Areas Mean Household Income
Rank
Postcode
Area
Area Name
Total
Households
All
Singles &
Couples:
18-34 - No
Children
Families:
Children in
Household
Empty
Nesters: No
Children in
Household
Retired: No
Children in
Household
1 KT
Kingston upon
Thames
226,901 £55,300 £49,200 £62,600 £58,900 £43,000
2 GU Guildford 300,503 £52,800 £47,300 £59,300 £57,100 £40,800
3 AL St Albans 105,372 £51,800 £44,400 £58,600 £56,200 £39,600
4 SW London SW 403,379 £51,700 £48,600 £55,300 £56,100 £37,000
5 W London W 245,528 £50,600 £47,500 £54,500 £55,200 £36,500
6 RG Reading 331,794 £50,500 £44,100 £56,600 £54,900 £37,300
6= SL Slough 153,040 £50,500 £45,500 £54,600 £55,100 £39,500
8 BR Bromley 132,439 £49,700 £45,700 £56,200 £55,200 £37,300
8= RH Redhill 231,077 £49,700 £44,200 £56,500 £54,200 £37,200
10 HP
Hemel
Hempstead
208,189 £49,400 £42,800 £54,900 £53,400 £38,700
Table 4: Bottom 10 Postcode Areas Mean Household Income
Rank
Postcode
Area
Area Name
Total
Households
All
Singles &
Couples:
18-34 - No
Children
Families:
Children in
Household
Empty
Nesters: No
Children in
Household
Retired: No
Children in
Household
1 SR Sunderland 112,002 £28,000 £26,600 £34,400 £32,900 £18,400
2 L Liverpool 384,550 £29,200 £27,200 £35,100 £33,900 £20,000
3 DG Dumfries 69,216 £29,900 £28,500 £36,800 £33,900 £21,400
3= SA Swansea 324,091 £29,900 £28,700 £36,900 £34,500 £21,200
5 LD
Llandrindod
Wells
22,828 £30,600 £30,800 £38,600 £35,700 £22,100
6 OL Oldham 195,007 £30,700 £27,500 £35,800 £34,700 £20,100
6= WV Wolverhampton 168,670 £30,700 £27,000 £36,400 £35,500 £20,800
8 FY Blackpool 127,912 £30,800 £29,800 £38,600 £35,400 £21,700
9= HS Outer Hebrides 13,113 £30,900 £30,900 £39,000 £35,700 £22,500
9= M Manchester 521,060 £30,900 £30,600 £35,600 £35,000 £19,200
10= BB Blackburn 206,024 £31,100 £27,500 £36,200 £35,500 £20,800
There are some surprises in the bottom 10 postcode areas with the appearance of Oldham, Blackpool and Manchester.
Oldham and Manchester seemed to have weathered the economic downturn relatively unscathed, but their appearance
in this list could indicate an underlying issue. Blackpool’s airport closed to commercial flights in October 2014 (although
some non-commercial flights still operate) which may have reduced the overall average household income as employees
will have been reassigned to other duties or left their jobs.

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The above table includes areas of quite different characteristics5
. As expected, London and the South East dominate
the list. It is interesting to note, however, that areas further north of London are beginning to appear in the list. This is
probably due to the migration of well-paid commuters moving out of London as house prices continue to rise.
Table 5: Top 10 Postcode Sectors
Rank Postcode Area Ward/Neighbourhood Local Area Region
Total
Households
Mean
Household
Income
1 SW11 6 Northcote Wandsworth London 4,403 £73,300
2 N 20 8 Totteridge Barnet London 1,617 £73,100
3 AL 5 3 Harpenden North St Albans East of England 1,713 £72,900
4= RG41 4 Evendons Wokingham South East 1,505 £72,700
4= WF 3 4 Chorleywood North & Sarratt Three Rivers East of England 1,469 £72,700
6 SE21 7 Village Southwark London 1,464 £72,600
7 AL 5 2 Harpenden West St Albans East of England 1,835 £72,500
8 SM 2 7 Cheam Sutton London 2,295 £71,700
9= KT10 9 Esher Elmbridge South East 2,016 £71,400
9= SW13 8 Barnes
Richmond
upon Thames
London 837 £71,400
10 GU15 1 Heatherside Surrey Heath South East 3,855 £71,300
3.3. POSTCODE SECTORS
Map 5: AL5 3 – North of Harpenden
5
The relative position in the rankings by postcode sector can reflect the quirks of postal geography e.g. a postcode sector with a small number of
households in a homogenous new-build area with few pensioners can have a very high average income. On the other hand a postcode sector with a large
number of households including some very affluent streets may have a lower average income due to its demographic diversity.

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As expected, the postcode sectors that appear in the bottom 10 list are well known to their respective local councils
as areas in need of investment and regeneration, many of which are in the process of transition. Unsurprisingly, these
postcode sectors have the highest proportions of households living below the statutory poverty line – 73%, compared
to the national average of 29%.
The postcode at joint number 1 in our list, TS1 5 in Middlesbrough, has been a feature of the bottom 10 list for
the past 10 years.
Table 6: Bottom 10 Postcode Sectors
Rank Postcode Area Ward/Neighbourhood Local Area Region
Total
Households
Mean
Household
Income
1 TS 1 5 Newport Middlesbrough North East 797 £13,200
1= B 7 4 Nechells Birmingham West Midlands 1,453 £13,200
3 CH41 3 Birkenhead and Tranmere Wirral North West 707 £13,900
4 L 7 5 Kensington and Fairfield Liverpool North West 565 £14,000
5 B 19 3 Aston Birmingham West Midlands 1,315 £14,100
6 L 5 0 Everton Liverpool North West 854 £14,300
6= LE 1 2 Wycliffe Leicester East Midlands 1,608 £14,300
8 L 5 2 Kirkdale Liverpool North West 608 £14,400
9 NE 4 7 Elswick
Newcastle
upon Tyne
North East 1,323 £14,500
10 DN32 7 East Marsh
North East
Lincolnshire
Yorkshire and
The Humber
3,719 £14,900
Map 6: TS1 5 – Middlesborough
© CACI Ltd
1
Map 2: TS1 5 – Middlesborough

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Table 7: Average Income indexed by Acorn Group (100 = National Average)
4.0 LIFESTYLE CONSIDERATIONS
The geographical spread of income is intrinsically linked to the underlying demographics through local populations.
Because of this we are also able to link other lifestyle and economic attributes to local neighbourhoods and see how
they relate to income.
4.1. ACORN
This first chart shows how income is distributed across the Acorn6
Groups. It is clear that the older groups
(Comfortable Seniors and Poorer Pensioners) have much lower incomes than the overall for the Acorn Categories of
which they are a part.
4.2. HOUSING AFFORDABILITY
Another consideration that can be applied to this income dataset is that of housing affordability. House prices are
often seen as a barometer for the strength of the economy. However, a home is only affordable if someone has the
means to pay for it.
In this study, we will use the average house price from CACI’s Ocean StreetValue dataset in combination with
household income to ascertain the cash shortfall in the highest and lowest income areas at Local Authority District /
Unitary Authority level (i.e. Richmond-upon-Thames and Blaenau Gwent).
Lavish Lifestyles
Executive Wealth
Mature Money
City Sophisticates
Career Climbers
Countryside Communities
Successful Suburbs
Steady Neighbourhoods
Comfortable Seniors
Starting Out
Student Life
Modest Means
Striving Families
Poorer Pensioners
Young Hardship
Struggling Estates
Difficult Circumstances
0 20 40 60 80 100 120 140 160 180 200
6
http://acorn.caci.co.uk

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The above tables make a number of assumptions:
• No other equity available
• 10% deposit (i.e. 90% LTV requirement)
• Mortgage availability equal to 3.5 x income
Whilst it appears that the lower income areas are more likely to be able to afford homes within their local area, it is
also more likely that they would not qualify for a mortgage. Whereas, the higher income areas are more likely to be
able to call on additional funds.
Table 8: Richmond-upon-Thames
– Cash Gap Matrix
House Type
Flat/
Maisonette
Terraced
Semi-
Detached
Detached All
£557,000 £868,000 £1,072,000 £1,633,000 £875,000
LifeStage
Young Singles & Couples £55,500 -£334,300 -£614,700 -£798,200 -£1,303,500 -£621,300
Families £50,900 -£348,300 -£628,600 -£812,200 -£1,317,400 -£635,300
Empty Nesters £59,700 -£321,600 -£602,000 -£785,500 -£1,290,800 -£608,600
Retired £47,900 -£357,100 -£637,400 -£812,000 -£1,326,300 -£644,100
All £61,200 -£317,300 -£597,600 -£781,200 -£1,268,400 -£604,300
Table 9: Blaenau Gwent
– Cash Gap Matrix
House Type
Flat/
Maisonette
Terraced
Semi-
Detached
Detached All
£57,000 £73,000 £94,000 £158,000 £85,000
LifeStage
Young Singles & Couples £24,900 £23,400 £8,900 -£10,000 -£67,100 -£1,800
Families £22,100 £15,000 £600 -£18,400 -£75,500 -£10,200
Empty Nesters £26,500 £28,300 £13,800 -£5,100 -£62,200 -£3,100
Retired £18,500 £4,000 -£10,400 -£29,300 -£86,500 -£21,100
All £24,200 £21,200 £6,700 -£12,200 -£69,400 -£4,000

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There is a strong urban skew to over-indebted areas,
with all of the fifteen most over-indebted Postcode
Sectors forming part of densely-populated towns
and cities. Conversely the fifteen least over-indebted
Postcode Sectors feature rural areas, in addition to
affluent suburbs.
5.0 OVER-INDEBTEDNESS
CACI has recently worked alongside the Money Advice Service, the largest single funder of debt advice across the UK.
The focus of the work was on individuals that either were finding keeping up with bills and credit commitments a heavy
burden, or else had fallen behind or missed payments – these people were defined as “over-indebted”.
It is surely reasonable to assume there is a strong link between over-indebtedness and household income, and indeed
we found low income to be a driver of over-indebtedness. But actually the full picture was much more complex, and
once other factors such as dependents and tenure are taken into account, household income (except within the very
lowest income band) has little to do with over-indebtedness. Meeting financial commitments may be just as much of a
struggle for higher-income households as it may be for lower-to-average income households.
5.1. A REGIONAL PICTURE OF OVER-INDEBTEDNESS
Across the United Kingdom the average level of over-indebtedness stands at 16.1%, suggesting that an overwhelming
one in six people in the UK are over-indebted.
But because there appears to be many predicting factors behind an individual’s likelihood to be over-indebted, over-
indebtedness is prevalent in each and every part of the country – not just in less affluent areas, but more unexpectedly
in those regions normally regarded as “well-off”. The London Borough of Richmond-upon-Thames is often regarded as
one of the most affluent parts of the country, but even here 11.5% of individuals are over-indebted.
The regional picture is one that splits the country into two halves. Whilst it is true that the north-south divide may
be being eroded in terms of household income (see map 1), there is a suggestion that those in northern and western
regions are more likely to be struggling with financial commitments than those in southern and eastern regions. Within
England the highest regional levels of over-indebtedness are found in the West Midlands (18.0%), the North East
(17.7%) and London (17.4%).
Scotland has a much lower over-indebtedness likelihood than other countries at just 13.2% – there are no
English regions lower than this. By comparison the proportions in Northern Ireland and Wales are 21.0% and
19.6% respectively.
Over-indebtedness by UK Postcode Sector
Map 7: Over-indebtedness by UK Postcode Sector

17
Postcode
Sector
Ward /
Neighbourhood
Local Area
Over-Indebted
Individuals
DA18 4
Belvedere & Abbey
Wood
Erith 45.6%
PO 1 4 Portsmouth Portsmouth 40.1%
PO 1 1 Portsmouth Portsmouth 37.4%
SO14 1 Southampton Southampton 36.9%
B 7 4 Duddeston Birmingham 36.0%
MK 6 4
Beanhill &
Netherfield
Milton Keynes 34.9%
B 19 3 Hampton Street Birmingham 34.0%
B 66 3 Smethwick Birmingham 33.8%
B 19 2 Newtown Birmingham 33.6%
SE18 5 Woolwich Riverside London 33.1%
LE 1 2 Spinney Hills Leicester 32.9%
B 7 5 Nechells Birmingham 32.9%
PO 5 4 Somerstown Southsea 32.9%
B 18 4 Winson Green Birmingham 32.8%
B 35 7 Castle Vale Birmingham 32.5%
Postcode
Area
Ward/
Neighbourhood
Local Area
Over-
indebtedness
Individuals
WD 3 4 Loudwater Rickmansworth 6.5%
KA 7 4 Seafield & Alloway Ayr 6.5%
EH 4 3 Ravelston Edinburgh 6.5%
EH 9 2
Southside &
Newington
Edinburgh 6.5%
BH24 2
St Leonards and
St Ives
Ringwood 6.5%
BH25 7 Barton on Sea New Milton 6.5%
AB15 9 Cults Aberdeen 6.4%
EH12 6
Corstorphine &
Murrayfield
Edinburgh 6.4%
BH13 7
Canford Cliffs &
Sandbanks
Poole 6.2%
EH10 7 Swanston & Hillend Edinburgh 6.2%
AB15 7 Broomhill Aberdeen 6.1%
AL 5 2 Rothamsted Harpenden 6.1%
PO19 5 Chichester North Chichester 6.0%
EH 4 6 Cramond Bridge Edinburgh 5.8%
AB13 0 Milltimber Milltimber 5.8%
Table 10:
15 Most Over-indebted Postcode Sectors
Table 11:
15 Least Over-indebted Postcode Sectors
5.2. KEY FACTORS OF OVER-INDEBTEDNESS
The regional disparities in levels of over-indebtedness are being driven by a variety of factors. And it is regional
differences in levels of these driving factors that are leading to variations in over-indebtedness from one postcode
sector to another. Using CACI’s Ocean7
lifestyle database, we were able to define five key factors that are associated
with increased levels of over-indebtedness.
RENTING
29% of those renting from a Local Authority or housing association are over-indebted, as are 21% of those renting from
a private landlord. This compares to just 12% of home owners.
The highest concentrations of tenants can be found in London, where half of adults rent their home – this rises to 70%
in areas such as Hackney and Tower Hamlets (the majority of which are social renting).
LARGER FAMILIES
Having children increases the chances of being over-indebted by more than 50% (from 13% for no children to 20% for
those with children). But analysis shows that there is a particularly strong relationship between over-indebtedness and
families with three or more children. Families with one or two children have a likelihood of 19%, but this increases to
26% with the presence of a third child.
7
http://www.caci.co.uk/products/product/ocean

18
SINGLE PARENTS
Of the 3 million single parents in the UK, 28% are over-indebted. This is one-and-a-half times more likely than two-
parent families.
London is the region with the highest proportion of single parent families – there are more than half a million single
parents here, and this is a key component of over-indebtedness in the capital.
YOUNGER AGE GROUPS
Generally speaking, younger people are much more likely to be over-indebted than older people. In fact those aged 25-
34 are four times as likely as those aged 65 or older. In the eldest group of people (those aged 75+) only one in twenty
is over-indebted. This age factor naturally raises the over-indebtedness rate in more metropolitan populations, and
lowers it in more traditional areas such as the South Coast and East Anglia.
HOUSEHOLD INCOME
And last, but by no means least, is household income. Perhaps it is no surprise that the level of household income,
derived from Paycheck, is an important factor in predicting the likelihood of over-indebtedness. But more surprising is
the fact that income is not related to over-indebtedness in a straight, linear fashion.
There were no apparent links between the majority of household income bands and the perceived level-of over-
indebtedness – for example households earning £15,000 per year were no more likely to struggle with household
bills than those earning £25,000, and at these levels other factors such as children or tenure are more correlated with
over-indebtedness.
However a household income of £10,000 proves to be a tipping point, especially where there are children present.
Those earning less than this amount – the very lowest-earning families – are significantly more likely to be over-
indebted, with an average likelihood of 24%. This is one-and-a-half times more likely than households with incomes in
other bands, who all average around 15%.
These lowest-income households are predominant in urban areas such as Kingston upon Hull, Nottingham, Sandwell
(West Midlands) and Knowsley (Liverpool) – all of which have one in five households earning less than £10,000.
A full and comprehensive report on over-indebtedness, compiled and published in 2015, can be found on the Money
Advice Service website: http://bit.ly/2gxDTS2

19
6.0 HIGH NET WORTH INDIVIDUALS (HNWIS)
At the other end of the spectrum are the High Net
Worth Individuals (HNWIs) who are typically defined
as those who have £600,000+ in assets in addition to
their main home. These people make up the top 1%
of the UK population, accounting for over 550,000
people. In terms of their demographics, 71% of these
people are male with the majority falling in the 65+
age bracket and 65% of them still receiving household
incomes of over £100,000 pa.
6.1. THE DEMOGRAPHICS OF HNWIS
For this exercise we have profiled data from Ocean
Affluence which splits the UK population into 7
Affluence bandings. The top 1% of the population we
classify as HNWIs.
Demographics HNWIs UK Base
Gender
Female 29% 53%
Male 71% 47%
Age
18 - 44 3% 44%
45 - 64 43% 33%
65 + 54% 23%
Household
Income
£75,000 - £99,999 35% 6%
£100k+ 65% 4%
6.2. LOCATION OF HNWIS
As might be expected the majority of these people
are concentrated in London and the South East
but there are pockets of them around the country,
particularly around Cheshire and the Wirral.
Postcode
Sector
% Most
HNWIs
Area
1 SW1A 1 100 Mayfair - London
2 SW1Y 5 100 St James's - London
3 CH64 8 100 The Wirral - Cheshire
4 EC1V 2 100 Old Street - London
5 SW1X 7 66.67 Knightsbridge - London
6 SW1X 8 66.67 Knightsbridge - London
7 W 1G 6 66.67 Marylebone - London
8 HP17 0 54.55
Aylesbury -
Buckinghamshire
9 CB 2 7 50 Cambridge
10 CH48 2 50 The Wirral - Cheshire
11 RG 9 6 50
Henley - on - Thames,
Oxfordshire
12 SW1W 0 50 Victoria -London
13 W 1K 3 50 Whitehall - London
14 PL 8 1 46.15 Plymouth - Devon
15 BH24 4 44.44
Burley (The New
Forest) - Hampshire
Table 13: Top 15 Postcode Sectors by % HNWIs
Table 12: Demographic Profile of
High Net Worth Individuals

20
Online Habits HNWIs UK Base
Has bought online in the last 12 months 97% 79%
Often uses price comparison sites 86% 47%
Buys alcohol online 50% 13%
Buys theatre and events ticket online 70% 32%
Researches products and services online 88% 40%
Checks investments online 67% 10%
6.3. LIFESTYLES OF HNWIS
In addition to demographics and locations we can also determine many lifestyle factors about the most affluent in
society. They are more likely to have bought something online in the last 12 months (such as wine or theatre tickets) as
well as using the Internet as a research tool. They tend to bank online and use websites for checking their investments.
Perhaps most interestingly is they are twice as likely to use price comparison websites than the UK population ensuring
they don’t waste any of their wealth!
© CACI Ltd
1
academic and/or non-commercial purposes
Map 8: High Net Worth Individuals
Table 14: Online Habits of HNWIs

21
CONCLUSION
We hope you have found the Wealth of the Nation report interesting and informative. To conclude, we’d like to draw
out some of the report’s top insights:
1. Average household income across the country is £37,300; it is highest across the South East region at £44,400 and
lowest in the North East at £31,500.
2. Almost 7.8 million households (29% of GB) have an income less than the government’s own threshold of poverty.
3. Large income disparities exist between neighbourhoods close to each other. The Wirral in Merseyside has the
largest income gap of all Local Authorities, with the difference between postcode sectors with the highest and
lowest average incomes being almost £56,000.
4. One in six of the UK population are over-indebted, finding their financial commitments a burden. These people are
most likely to be found in postcode sectors in the Midlands and the North of the England.
5. Five key indicators associated with increased levels of over-indebtedness are: renting; larger families; single parents;
younger age groups; and household income.
6. High Net Worth Individuals, typically defined as those who have £600,000+ in assets in addition to their main
home, represent the wealthiest 1% of the population. Demographically, they are 71% male, and more than half of
them are aged over 65.
If you’d like more support in understanding the Wealth of the Nation, or some bespoke recommendations on how
your organisation might turn this insight into action, help to enrich your marketing effort or to better support your local
residents, please get in touch and we’ll be happy to help you.
Patrick Tate
020 7605 6186
ptate@caci.co.uk

CACI Report Reveals UK Wealth Distribution

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