UK incomes fall £2,500
UK incomes fall £2,500
Friday 22nd August 2008
UK households' disposable income fell £2,500 in the last year.Data from uSwitch.com reveal the average household's disposable income has fallen for the first time since 1997 by 15 per cent to £14,520 amid the strong headwinds of rising food, fuel and energy prices.
Rising bills mean homes have to find £145 extra a month, while salary inflation is just at 3.4 per cent.
Disposable income now represents just 28 per cent of gross household income, compared to 35 per cent in 2007.
Official inflation data show consumer prices index (CPI) rose 4.4 per cent in the last year and the retail prices index was up five per cent.
Food inflation is up 13.7 per cent, while the cost of unleaded petrol is up 28 per cent.
Energy prices are up 61 per cent – or £555 – in the last year.
Ann Robinson, uSwitch director of consumer policy, said: "While British athletes have been going for Gold, British consumers are going for broke. It's been a year since the start of the credit crunch and these figures reveal the exact price being paid by British consumers.
"Consumers are in a lose/lose situation where everything is shooting up except their income."
She added: "It's a Catch 22 situation - struggling consumers need pay rises to help them meet the mounting cost of living, but the Bank of England and the government wants to keep pay rises to a minimum to dampen inflation."
The research also shows it the nation's poorest households that are hit hardest.
There are now 5.6 million citizens of the glorious monarchy living below the 40 per cent of national average income, compared to 1.3 million at the end of the 1970s.
Furthermore 35 per cent are not expecting a pay rise and of those due a raise, 74 per cent will see their wage packet grow by under four per cent.
Across the country, Newcastle has the lowest disposable income at £4,836, followed by Hull (£8,448), Nottingham (£8,448), and Blackpool (£9,263).
West London households top the league at £41,610, beating Guildford (£31,364), Aylesbury (£30,837), and outer north and north-west London (£27,193).
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