Upper-middle class see strongest income growth in Cyprus

Cyprus’ middle income class continued to dominate the income distribution in 2024, accounting for almost two-thirds of the population, according to figures published on Monday by the state statistical service (Cystat).

According to the findings, 64.6 per cent of the population belonged to the middle income class last year, while 27.8 per cent were classified in the lower income class and 7.6 per cent in the upper income class.

The classification follows the methodology recommended by the Organisation for Economic Co-operation and Development (OECD) and is based on equivalised disposable household income, which adjusts total household income for household size and composition.

Under this framework, the middle income class includes individuals living in households with income between 75 per cent and 200 per cent of the national median, while income below 75 per cent places households in the lower income class and income above 200 per cent in the upper income class.

In 2024, the national median equivalised disposable income stood at €20,667, Cystat said.

On this basis, households earning up to €15,500 were classified as belonging to the lower income class, those earning between €15,501 and €41,332 as middle income, and those with income above €41,333 as upper income.

Against that backdrop, income thresholds increased across all income classes in 2024, continuing an upward trend seen in recent years following the sharp decline recorded after the financial crisis and a period of relative stabilisation during the Covid-19 years.

The strongest increase was observed in the upper-middle income group, while increases at the lower end of the income distribution were more limited.

Looking at longer-term trends, the middle income class has consistently accounted for the largest share of the population over the period 2011–2024, remaining above 60 per cent in most years.

The lowest share was recorded in 2015, at 58.6 per cent, before gradually recovering to current levels.

Cystat’s analysis further breaks down the middle income class into three sub-groups, emphasising differences within what is often treated as a single category.

In 2024, 22.2 per cent of the population fell into the lower-middle income group (75 – 100 per cent of the median), with a median income of €17,800.

A further 30.7 per cent belonged to the middle-middle income group (100 – 150 per cent of the median), with a median income of €24,975, while 11.7 per cent were classified as upper-middle income (150 – 200 per cent of the median), earning a median of €34,961.

Differences across income classes become more pronounced when examined by economic activity.

Among people aged 16 and over, 68.6 per cent of those in the middle income class were employed in 2024, while 14 per cent were pensioners, 14.9 per cent were otherwise economically inactive and 2.5 per cent were unemployed.

By contrast, in the lower income class, employment stood at 36.6 per cent, while pensioners accounted for 35.9 per cent of the population and economically inactive individuals for 20.7 per cent.

In the upper income class, 71.7 per cent of individuals were employed, while unemployment was limited to 1.6 per cent.

Household composition also varied significantly across income groups.

Within the middle income class, 45.9 per cent of individuals lived in households without dependent children, while 20.5 per cent lived in households with one dependent child and 24.2 per cent in households with two.

Households with three or more dependent children accounted for 9.4 per cent.

In the lower income class, households without dependent children were more prevalent, accounting for 56 per cent, while households with three or more dependent children represented 13.7 per cent.

In contrast, such households were relatively rare in the upper income class, where they accounted for 2.5 per cent of the total.

Age distribution further emphasises income disparities. In 2024, individuals aged 65 and over accounted for 30.5 per cent of the lower income class, compared with 12.2 per cent of the middle income class and 16.3 per cent of the upper income class.

Working-age adults were concentrated primarily in the middle and upper income groups.

The figures also point to persistent pressure on lower income households in relation to housing costs.

In 2024, 27 per cent of individuals in the lower income class lived in households that had delayed payments on rent or mortgage instalments.

This compared with 9.9 per cent among middle income households and 3 per cent among those in the upper income class.

Within the lower income class, 14.6 per cent of the total population were classified as at risk of poverty, defined as living in households with income below 60 per cent of the national median.

For 2024, this poverty threshold corresponded to an annual equivalised income of €12,400, according to Cystat.