Brits have `less disposable income`

26 August 2008

Households in the UK now have less disposable income, according to research released by uSwitch.

The average UK household`s disposable income – the remainder of gross income once essential household expenditure, social contributions and taxes have been taken out – is now £14,520, a total of £2,491 less than last year.

Furthermore, it is the first time the figure has dropped since 1997, despite average salaries increasing.

Director of consumer policy at the company Ann Robinson said it was a "lose/lose situation" because inflation is rising above salary levels.

"People now have less money in their pockets than at any point since 1997 and British consumers are facing an autumn of discontent," she said.

Ms Robinson added people may be likely to choose to move away from the UK but declining house prices and the difficulties people are experiencing in selling may damage such plans.

An increase in loans may be expected as people struggle to pay to maintain their lifestyles.

While a consolidation loan may be suitable for people who want to get out of debt, secured and unsecured loans may bring in extra cash. However, last week uSwitch said unsecured personal loan rates have risen recently.

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