UK household disposable income rises but generation gap widens

New figures from the Office for National Statistics (ONS) show that the average UK household’s disposable income rose by £564 in 2015/16.

However, the figures also indicate a significant gap between working age and retired households.


The data revealed that the typical UK household had £26,332 to spend after taxes were paid and benefits received, a 2.2% rise on the previous year.

But that gain masks disparities between the median income for working households, which remains broadly unchanged, and the median income for retired households, which saw a 3.1% increase, owing primarily to income from private pensions. If only working households are considered, the median disposable income is still 1.2% below its value before the 2007/08 financial crisis.

The richest fifth of households saw real incomes fall back by £1,000 a year, while the poorest gained £700 on average in 2015/16.

Matthew Whittaker, Chief Economist at the Resolution Foundation, said: ‘It was another strong year for living standards, particularly for poorer households. Strong employment growth, low inflation and rising pensioner incomes over recent years have helped drive inequality down to its lowest level in nearly 30 years.’


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