The information provided in this article was accurate at the time of publishing and should be read in the context of the date it was published. Views in this article are those of the author alone and do not necessarily represent the view of Scottish Friendly.

Scottish Friendly’s latest Disposable Income Index (August 2016) reveals that while the amount of money that people, on average, have left each month after paying for the absolute essentials like housing, energy and water has increased slightly, from £1,000 to £1,024, people are still feeling hard-pushed financially. Our previous survey also showed a slight increase in disposable income in part due to low inflation and the rise in the national living wage.

Despite these improvements, most households don’t feel like they’re getting better off. Only 19% of households feel they have more cash left over at the end of the month than they did 12 months ago.  Indeed, 47% of households are worried about how they would deal with a big unexpected bill like the car or washing machine breaking down.

What’s also preying on the minds of working households is how the UK leaving the EU will affect them financially – 52% have concerns around this.

Encouragingly, research we conducted as part of our Disposable Income Index in July has found that despite the recent bumpy ride, people in the UK have actually increased the amount they are putting aside into savings and investments. Just over half of all households (51.5%) regularly save or invest each month and 11.6% say they are planning to save more as a result of the EU referendum, compared to 5.6% who plan to save less.

Our survey shows that some groups find themselves more squeezed that others. Nearly one in five households (19%) aged 18-24 spend more than their income on housing costs alone. Lower earnings growth and higher house prices mean that many in this group struggle to make ends meet.

The generational divide is also visible between those of working age and those in retirement. The average household of a retiree has £1,500 left over each month after buying essentials, £500 more than the average household.

This disparity in favour of the older generation is primarily attributable to them being less encumbered by the burden of housing costs. This, combined with the trend for older people to work longer, have relatively generous private pension provisions and the fact that younger generations have seen slower pay growth, means that older households are, on average, significantly better off.

Despite the recent blow to savers of the cut in interest rates, it’s encouraging to see many still recognise the benefit of putting money aside. With economic uncertainty ahead, building a robust buffer is going to be important for many households.

Visit Scottish Friendly’s Insight Hub where you can interact with our Disposable Income Index Tool by comparing finances from a comprehensive range of demographics.  Visit

Scottish Friendly’s Disposable Income Index is now in its third year. Using new survey data across 2,000 people nationwide, it provides a unique insight into the financial health of the UK population.

No advice has been provided by Scottish Friendly. If you are in any doubt as to whether a savings or investment plan is suitable for you, you should contact a financial adviser for advice. If you do not have a financial adviser, you can get details of local financial advisers by visiting Advisers may charge for providing such advice and should confirm any cost beforehand.