Savers making the most of 1.5 percentage point rise in disposable income

Press release 11th August 2015

  • Year-on-year rise in disposable income of 1.5 percentage points – equating to 9.7 per cent of take home salary
  • Last quarter saw a slight dip in disposable income by 0.2 of a percentage point
  • Despite this, the number of people putting money aside increased in the last quarter 6.6 per cent

Savers have been making the most of a year-on-year rise in disposable income of 1.5 percentage points, with the last three months seeing 6.6 per cent more people putting money aside into savings and investments – rising by 1.7 million people to a total of 27.3 million savers a month.

According to the latest findings from Scottish Friendly’s ‘Disposable Income Index’, the rise in the amount being saved by UK households has come despite a slight dip in disposable incomes of 0.2 of a percentage point over the last quarter. (1)

The quarterly report, which looks at saving and spending habits across the UK, has revealed that after bills and essentials have been paid for, people are currently left with around 9.7 per cent of their salary in spending money, an average of £240 per person.

Calum Bennie, savings expert at Scottish Friendly, said: “While disposable incomes have fallen over the last quarter, overall, people are still better off than they were this time last year and this has been reflected in the amount of money people are able to put aside into savings.

“Although we have seen a slight decline in disposable incomes, figures suggest that the economy is continuing to grow, so we can expect this to be a temporary blip.

“A wider concern over the coming months will be whether inflation continues to rise and if the Bank of England decides to increase interest rates. If this does happen, we can expect the amount people have left over each month to fall dramatically, especially among homeowners, who will see the cost of borrowing rise significantly.”

Regionally over the last year every part of the UK saw a year-on-year rise in disposable income apart from the North West, which experienced a fall of 0.1 of a percentage point.

Over the last three months, the East Midlands saw the largest rise in disposable income, climbing by 1.5 percentage points. This was closely followed by Yorkshire & Humberside which rose 1.3 percentage points.

In comparison, Northern Ireland suffered the biggest decline with a fall of 1.4 percentage points and the West Midlands saw the second largest, falling by 0.8 of a percentage point.

The quarterly figures also showed the East Midlands currently has the highest levels of disposable income, with residents taking home, on average, 11.8 per cent of their salary each month. This is closely followed by people in the South West who have 11.3 per cent of their salary as spending money and the Scots who have 10.8 per cent of their income left over each month.

Bennie, continued: “Regionally, it’s a mixed bag. We know that the economic recovery has been uneven across the UK and this certainly shows in the areas of the country that have seen a boost in disposable income and those that continue to lag in the doldrums.”

 

Quarterly change in levels of disposable income by region:*:

Region of the UK

Per cent of salary attributed to disposable income – Q2 2015

Per cent of salary attributed to disposable income – Q3 2015

Percentage point difference

Average disposable income Q2 2015

NATIONAL

9.9 per cent

9.7 per cent

-0.2

£240

East Midlands

10.3 per cent

11.8 per cent

1.5

£273

Yorkshire & Humberside

8.5 per cent

9.8 per cent

1.3

£208

Wales

8.7 per cent

9.6 per cent

0.9

£232

South West

10.5 per cent

11.3 per cent

0.8

£255

North East

9.2 per cent

9.2 per cent

-

£195

South East

9.6 per cent

9.6 per cent

-

£232

North West

9.3 per cent

9 per cent

-0.3

£225

Scotland

11.1 per cent

10.8 per cent

-0.3

£252

London

10 per cent

9.5 per cent

-0.5

£300

West Midlands

10 per cent

9.2 per cent

-0.8

£234

Northern Ireland

8.0 per cent

6.6 per cent

-1.4

£136

 

Annual change in levels of disposable income by region:

Region of the UK

Per cent of salary attributed to disposable income – Q2 2015

Per cent of salary attributed to disposable income – Q3 2015

Percentage point difference

NATIONAL

8.2 per cent

9.7 per cent

1.5

East Midlands

8.3 per cent

11.8 per cent

3.5

Scotland

8 per cent

10.8 per cent

2.8

London

6.9 per cent

9.5 per cent

2.6

South West

11.3 per cent

11.3 per cent

2.1

South East

7.7 per cent

9.6 per cent

1.9

Yorkshire & Humberside

8.7 per cent

9.8 per cent

1.1

North East

8.7 per cent

9.2 per cent

0.5

West Midlands

8.8 per cent

9.2 per cent

0.4

Wales

9.2 per cent

9.6 per cent

0.4

Northern Ireland

6.5 per cent

6.6 per cent

0.1

North West

9.1 per cent

9 per cent

-0.1


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