What are the 4 income groups?
In the UK, income is commonly grouped into four bands: low income (typically below 60% of median household income), lower-middle, upper-middle, and high income. The Office for National Statistics (ONS) uses quintiles and deciles for statistical analysis. The median UK household income was approximately £35,000 per year in 2023/24, according to ONS figures.
How does income grouping affect access to financial services in the UK?
Income grouping plays a significant role in determining access to credit, savings products, and financial services. Lower-income consumers often face barriers including rejection by mainstream lenders, limited access to competitive mortgage rates, and higher dependence on high-cost credit. Open banking is increasingly being used to improve financial inclusion — enabling lenders to assess real affordability rather than relying on income band proxies.
How is open banking helping low-income groups in the UK?
Open banking allows lenders, debt advisers, and financial inclusion organisations to assess an individual’s actual financial situation in real time, rather than using blunt income group categories. This is particularly valuable for people with irregular income — such as gig economy workers or part-time employees — who may be underserved by traditional credit scoring models.
Open Banking in Practice: The FCA’s Financial Lives Survey regularly tracks financial product access across income groups in the UK. Open banking data is being explored as a tool to bridge the gap between underserved consumers and appropriate financial products. The JROC’s 2023 roadmap explicitly references financial inclusion as a priority outcome for the next phase of open banking. Read our guide to open banking and financial inclusion on openfuture.world.
FAQ
What is classed as low income in the UK?
Low income is typically defined as household income below 60% of the median — around £21,000 per year after housing costs, based on 2023/24 ONS data.
Does open banking help people with no credit history get loans?
Yes — open banking lets lenders assess real income and spending, which is especially helpful for those with thin or no credit files.
What is group income protection insurance in the UK?
Group income protection is an employer-sponsored policy that pays a proportion of an employee’s salary if they are unable to work due to illness or injury.