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.
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.