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Improvement in household spending power

The latest figures released from the Office for National Statistics (ONS) reveal that the typical level of spending power, or disposable income, for the average UK household in 2014-15 was £25,700. This figure is £1,500 higher than the low point seen in 2012-13. This marks a milestone from the hit taken by disposable income levels seen during the financial crisis.

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This good news was compounded for pensioners who have been in receipt of the state pension, as the triple lock promise from the Government, whereby the state pension is guaranteed to rise each April by the highest of inflation, average earnings, or 2.5%, has seen the average pensioners household income rise by 7.7% or £1,500 between 2007-8 (the start of the financial crisis) and 2014-15.

However, by comparison, those people in employment have not been quite as lucky as they have seen their household disposable income rise by only 3.1%, or £900, over the same period.

Commenting on these statistics, the Chief Economist of the think tank, Resolution Foundation, was reported to have said: “Strong jobs growth and ultra-low inflation have finally pushed living standards back above where they were before the financial crisis. But the downturn has been felt very differently between generations, and across the UK.

“This generational divide opened up well before the financial crisis landed. As a result, typical working age families are no better off today than they were a decade ago, while typical pensioner incomes are 15% higher.

“This divide is unlikely to widen in the coming years, but nor do we see any sign of narrowing. By 2020, pensioner incomes are set to be over a third higher than they were at the turn of the century – more than double the increase experienced by working-age households.”

Issued by: Enable Independent Financial Life Planners • 
25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 – Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
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