Households are particularly concerned about financial fragility and external shocks despite a £34 increase in monthly disposable income in the last quarter, bolstered by continued low rates of inflation, the introduction of the National Living Wage and moderate pay growth across the private sector.
However, given the cost of housing and living in the capital, London’s disposable income after housing costs (£1,304) and essentials (£968), are both lower than the UK average, £1,352, the Scottish Friendly research found.
"It’s encouraging to see the median level of disposable income increase this quarter. The introduction of the National Living Wage is clearly a positive step and that, combined with low inflation and moderate private sector wage growth has helped certain sections of society to have more money in their pockets at the end of the month," Calum Bennie, savings expert at Scottish Friendly, said.
"However, our study continues to suggest that people are feeling financially fragile. Worries persist about preparedness for unexpected bills and debt.
"Not enough households are in a position to save at the end of the month and that is a concern. With financial security still seemingly very out of reach for many households, policy makers and businesses alike should take heed of the persistent insecure sentiment in London and the rest of the UK."
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But despite the improvement in headline figures people are worried about unexpected financial or economic shocks.
Over half of households in the capital (55.2 per cent) are concerned about the outcome of the EU referendum, 47.9 per cent are anxious about how leaving the EU would affect their family financially.
Those surveyed cited potential price rises and job losses as their main concerns.
"The possibility that prices may rise, that jobs could be lost or that rules around maternity leave or paid holiday may change are clearly important points affecting many people considering the impact of the EU referendum on the pound in their pocket," Bennie added.