Unemployed have more disposable income than part-time and zero-hour workers

Press release - 1st December 2014

  • Unemployed have 9.3 per cent of income left over after essentials are paid for, compared to 7.8 per cent for zero-hour workers.
  • UK disposable income at 10.5 per cent, up from five per cent at the start of the year – meaning an average disposable income of £278.
  • Londoners have seen the biggest rise in disposable income over last three months. Those in the North West have most spare cash as percentage of salary.

Unemployed people in the UK have more monthly disposable income than part-time and zero-hour workers according to a new report out today.

Scottish Friendly’s ‘Disposable Income Index’, which tracks the amount of money people have left over each month after bills and essentials have been paid for, has revealed that on average, the country’s unemployed have 9.3 per cent of their income left over each month compared to just 7.9 per cent for part-time workers and 7.8 per cent for zero hour workers.(1)

Indeed, according to the report, the nation’s unemployed have on average £174 left over as spending money each month, compared to just £130 for those who work zero-hour roles.

Across the UK, disposable incomes have risen by 2.3 per cent in the last three months(2). The survey shows people now have an average of 10.5 per cent of their salary left over each month after bills and essentials have been paid for, up from 5 per cent at the start of the year. This equates to an average disposable income of £278.(3)

Calum Bennie, spokesperson for ISA provider Scottish Friendly, said:
"While the country as a whole has higher disposable income than they did a year ago, there is a broader concern that those who work part-time or that have zero-hour roles are likely to have less cash in their back pocket than someone who is unemployed.

"The findings should serve as a stark warning of the problems facing so many workers in the UK. It’s bad enough that people don’t know what is going to be in their wage packet at the end of the month, but the index shows that for certain workers, there now appears to almost be a disincentive to work."

Despite the rise in disposable income, the number of people regularly putting money aside in savings each month saw a slight dip, falling by two per cent on the same period three months ago. At present there are around 29.3 million savers (58 per cent of adults in the UK) saving on average just £252 each month.

Bennie continued:
"It’s natural that we are likely to see a slight dip in savings in the run up to the festive season. That said, there is still over £73 billion being put into savings accounts each month and with over half of the adult population contributing, the UK is developing a savings culture. Hopefully as we move into next year we will start to see more people take advantage of new tax-free savings and investment products that come to market in the run up to April."

Current levels of disposable income by employment type:

Employment type Per cent of earnings attributed to disposable income Average monthly take home salary / income (after tax) Average disposable income
NATIONAL 10.5 per cent £2,647 £278
Full time 11 per cent £3,193 £355
Self employed 10.7 per cent £2,482 £268
Unemployed 9.3 per cent £1,869 £174
Short term contract 8.8 per cent £2,681 £236
Part time 7.9 per cent £2,419 £192
Hourly workers 7.8 per cent £1,647 £130

Regionally, London has seen the biggest rise in disposable income in the last three months. A rise of 3.5 per cent now means the average disposable income is £343. However, while London has the highest average disposable income, as a percentage of take home salary, people in the North West are left with the most cash in their pocket, at 11 per cent.

Current levels of disposable income by region:

Region of the UK Per cent of salary attributed to disposable income Average monthly take home salary (after tax) Average disposable income
NATIONAL 10.5 per cent £2,647 £278
North West 11.8 per cent £2,572 £305
East Midlands 11.3 per cent £2,580 £294
Scotland 10.8 per cent £2,776 £301
North East 10.6 per cent £2,146 £228
Yorkshire & Humberside 10.5 per cent £2,352 £248
London 10.4 per cent £3,277 £343
Wales 10.2 per cent £2,461 £252
West Midlands 10.0 per cent £2,645 £266
South East 9.9 per cent £2,971 £296
South West 9.7 per cent £2,362 £230
Northern Ireland 8.6 per cent £2,387 £207

Three month change in levels of disposable income by region:

Region of the UK Per cent of salary attributed to disposable income – Q3 Per cent of salary attributed to disposable income – Q4 Difference in per cent
NATIONAL 8.2 per cent 10.5 per cent +2.3
South West 9.2 per cent 9.7 per cent +0.5
Wales 9.2 per cent 10.2 per cent +1.0
North West 9.1 per cent 11.8 per cent +2.7
West Midlands 8.8 per cent 10.0 per cent +1.2
Yorkshire & Humberside 8.7 per cent 10.5 per cent +1.8
North East 8.7 per cent 10.6 per cent +1.9
East Midlands 8.3 per cent 11.3 per cent +3.0
Scotland 8.0 per cent 10.8 per cent +2.8
South East 7.7 per cent 9.9 per cent +2.2
London 6.9 per cent 10.4 per cent +3.5
Northern Ireland 6.5 per cent 8.6 per cent +2.1

Tax- free means free of income and capital gains tax. Tax treatment depends on individual circumstances and tax law may change in the future.

References:

  1. Research conducted by OnePoll. 2,000 adults in the UK were surveyed in November, 2014
  2. Research conducted by OnePoll. 2,000 adults in the UK were surveyed in September, 2014
  3. Research conducted by OnePoll. 2000 adults in the UK were surveyed in March, 2014.

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