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Londoners twice as rich as the North East

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13/07/2012
Disposable income in London is over 50% that of households in the North East, according to the latest data from the Office for National Statistics.

According to the report, across the UK as a whole the average disposable household income per head, which is the money left over after taxes and benefits, stood at £15,709 in 2010.

There were big variations across the country with London having the largest amount, £20,238, which was 51.8% higher than the lowest, the North East at £13,329.

Over the period 1997 to 2010 the region with the largest growth in household income per head was London, at 68.8%. This was closely followed by Scotland, which increased by 67.3%. The lowest increase was in Yorkshire and The Humber, at 52.3%.

The recession during 2008 and 2009 impacted on disposable income with the effect varying across the UK.

Although disposable income increased in monetary terms during the recession period, it slowed across almost all regions between 2008and 2009.

The West Midlands and the North East were the only regions where growth in disposable income increased during this period, albeit minimally at 0.4% and 0.2% respectively.

The region that saw the largest fall in the rate of growth over this period was Northern Ireland. It fell from a 2.4% growth in 2008 to 0.4% contraction in 2009.

Factors affecting this slowdown in the rate of growth of disposable income include unusually low interest rates for savings, a reduction in the numbers of people in employment, a fall in house prices, as well as minimal increases in wages and salaries for many in employment.

The highest disposable income was in Inner London – West at £33,323, which was more than twice the UK average.

The London boroughs of Westminster and Kensington and Chelsea are included in this region, all of which feature very high housing and living costs, therefore it would be expected that the residents would earn a high disposable income.

There was a significant gap to the second highest which was Surrey at £21,501; this was 55.0% below Inner London-West.

The lowest disposable income across the country in 2010 was in Nottingham at £10,702, which was less than a third of Inner London – West. One possible reason for Nottingham having the lowest disposable income could be due to its large student population.

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