To think there is something weird with how this ifs household income calculator is set up?

[whatkatydid2013]

https://ifs.org.uk/tools_and_resources/where_do_you_fit_in#tool-results-section

You can use the above website to get an idea where your household "fits" in terms of income vs average household in the UK. Essentially it takes:

Net earnings (wage or salary income, benefits you receive, income from savings and investment, profits or losses from self-employment, and any other sources of income) less your council tax & gives you an answer.

I put our details in and it has our household in the top 6% yet OH and I both earn well under 6 figures and, after pension contributions, we are entitled to claim child benefit. If we didn't have the kids then even without the benefit we'd be top 3% of households.

I think we are reasonably well off but surely there are enough people who are independently wealthy &/or have 6/7 figure salaries that no one with normal jobs/wages fits in the top 5%? If it's accurate then just how concentrated does that make wealth in the top 1% or less?

I'm pretty much in the middle, which feels about right. We work 65 hours a week between us (due to childcare), one on minimum wage and the other just above. On paper our earnings seem low compared to others but we are comfortable.
I think basing the assumption on most households having two adults working full time on a 'standard' wage would be completely wrong. Of the people I know most of the women still only work part time even though their children are grown up. Then there are those that can't work or can only work part time due to health reasons. Lots of people are single and single parents etc. So I can easily see how what seems like the 'typical' set up of two working adults will actually put you at a much higher centile.

What's interesting is the jump between 2 & 3 dc so if you have 2 dc & take home is 90k your in the top 10%. Add another dc & you drop down by 6%.

All db pension, teachers, doctors, civil servants etc have massive employer contributions butvthey don't count as income for this purpose.

Doesn't that skew things though?

I posted this on the other thread.

We come out as better off than only 14% of the population. But........

Mortgage paid off. Saving around £200pm from occupational pensions. When State Pensions start next year we can pretty much save all of it.

It's a rubbish tool for measuring "wealth" - the more income you have, the more you spend. More capital assets. You may have very little cash left over at the end of the month, but are investing thousands in pensions, have a house worth millions, have valuable jewellery etc etc.

You could say "I'm skint" - but you're not. You've just spent it. Money that most people don't have coming in to spend in the first place.

Our net income after tax and pensions is £6300, that puts us in the top 13%. We both work full time.

Very good tool to help us appreciate what we have.