Household income surpasses pre-crisis levels - but not for those in work

Jake Cordell
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Household finances are back where they were eight years ago
Household finances are back where they were eight years ago (Source: Getty)

Disposable incomes have finally reached their pre-crisis high after a seven-year battle to recover from the recession.

UK households had an average of £26,400 to spend in the last financial year, according to the Office for National Statistics (ONS), up 2.7 per cent on the year before and back above the £26,000 level reached in 2007/08.

The ONS calculates disposable income as all cash a household has left after accounting for direct taxes, like income tax, national insurance and council tax, and all earnings from employment, investments, pensions and welfare payments.

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The figures come on the same day the latest unemployment data showed the UK’s jobs recovery was holding its own against the tide of Brexit uncertainty. The employment rate set a new record high of 74.5 per cent in June and the claimant count, a measure of those on out-of-work benefits, also edged down in July against expectations.

Despite the climb back to pre-recession levels on an aggregate level, working families will have to wait a little longer to hit the same milestone. While retired households’ disposable incomes, at £21,500, are 8.6 per cent up on 2007/08, households of working age are taking home £29,200 - down £400 on its pre-crisis level.

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