64% of the population falls into the middle-income class

The Statistical Office recently released data showing that 64.1% of people in 2023 belonged to the "middle income class". The initial release of the "Population by Income Class" report, which offers insights into the social and economic traits of the top, middle, and lower income groups based on their equivalent disposable income, is where this information originates.

The paper looks at how each income class's financial boundaries have changed over time. Additionally, it provides a thorough analysis of income categories according to age demographics, household composition, and occupation. Notably, for a more thorough examination of its socio-economic character, the middle class, which accounts the largest group, is further divided into upper middle, middle middle, and lower middle categories.

In line with the methodology recommended by the Organisation for Economic Co-operation and Development (OECD), the "middle income class" refers to households with an income ranging from 75% to 200% of the national median income. Meanwhile, those with incomes above 200% are classified as "upper income", while households earning less than 75% of the national median are considered part of the "lower income class".

The report shows that in Cyprus, 28.0% of the population, or 257,000 individuals, fell into the lower income bracket. Within this group, 13.9% (or 127,200 people) were identified as "at risk of poverty". Meanwhile, 7.9% of the population, or 72,600 individuals, were categorized as belonging to the upper income class.

Historically, the middle-income class has consistently represented over 60% of the population, with the exception of periods following the financial crisis, such as in 2015 when the figure dropped to 58.6%.

Additionally, the data shows that people with lower incomes are more likely to have trouble paying their rent or home loans on time. Compared to 9.4% of the middle class and just 1.2% of the upper income group, 31.6% of those in the lower income class reported falling behind on their payments in 2023.

This study offers insightful information about Cyprus's income distribution, taking into account the continuous struggles and financial circumstances that different socioeconomic groups face.