Affluent classes: Earnings grow twice as fast

New research from Halifax Financial Services shows that the "affluent" or so called "middle" classes have prospered over the past decade. Earnings of these households have risen by 42.8% over the past decade, more than double the 18.2% rate of inflation for this group. Earnings for this group have also risen by more than that for the typical worker over the decade 42.8% against 39.5%.

The research also shows that contrary to popular belief, affluent families have experienced only slightly higher than average Consumer Price Inflation over the past ten years. Since 1997, affluent class earnings 42.8% have grown at more than double the rate of affluent class inflation 18.2%.

In 1997 the typical affluent class earnings were £25,126 rising to £35,875 over the following decade. Over the past five years, earnings of affluent class workers have risen by 19.8% from £29,942 to £35,875, again close to almost double the rate of inflation for these workers of 10.3%.

Over the past 5 years, affluent class earnings have also increased at a faster rate than earnings for the typical or median worker 19.8% against 18.9%. Similarly, since 1997, affluent class earnings have risen by more than that for the typical worker 42.8% against 39.5%.

Education has been the fastest growing price category in the CPI over the past year 14.0%, five years 42.4% and decade 87.0%. These rapid rises primarily reflect increases in university tuition fees and private school fees. Affluent families typically spend the most on education, with average expenditure of £1,676 per year, accounting for 5% of their total spending. In proportionate terms, this is two and a half times more than the average household, which spends 2% of total spending on education £317 per year.

As Tim Crawford, group economist at Halifax Financial Services, puts it: "The affluent classes have seen their earnings rise by more than twice the increase in prices over the past decade. They have also become better-off compared to the typical household.

"While affluent families are more likely to feel the burden of rapidly rising private school fees and higher university tuition costs than other households, other factors are helping to keep affluent class inflation rates down."

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2007-08-06 10:17:14 © Moneyextra.com