You are here: Home - Household Bills - News -

Household incomes rise as higher employment offsets benefit cuts

0
Written by:
22/03/2018
Poverty and inequality in the UK remained stable last year in spite of higher inflation and static benefit payments, according to figures published by the Department for Work and Pensions.

The Households Below Average Income (HBAI) survey for 2016/17 showed rising employment had offset static benefit payments.

Average (median) household net disposable income increased in real terms between 2015/16 and 2016/17. Since their lows in 2011/12, incomes have increased by around £35 per week. The median household income now sits at £25,700 a year for a couple with no children, 1.9% higher than last year.

The DWP said: “2016/17 was a relatively positive year in terms of the UK labour market, with earnings and employment both growing. Inflation was low with CPI around 1% on average. These are likely to be the main factors behind the income growth in 2016/17.”

The proportion of people living in poverty — defined as having an income below 60% of the contemporary median after paying housing costs — remained stable at 22% in 2016/17, largely unchanged since the early 2000s.

Adam Corlett, senior economic analyst at the Resolution Foundation, said: “Today’s household income survey – the most comprehensive we have – shows that typical households saw solid income growth of 2% in 2016/17.

“This very welcome growth was driven by the backdrop of very low inflation and rising employment last year – tailwinds that feel a world away from recent months of above target inflation and high but plateauing employment. While inequality remains broadly flat post-crisis, it is also concerning that relative child poverty has risen for five years in a row – a pattern that risks continuing over the coming years.

“More up-to-date official figures on pay, prices and employment suggest that income growth has since slowed, particularly for poorer households which are most affected by the cash freeze in working age benefits that is saving around £2.5bn in the coming financial year alone.”

Corlett added that getting household income growth back on track was the single biggest domestic challenge facing the government in this parliament.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Autumn Statement: Everything you need to know at a glance

Yesterday Chancellor Jeremy Hunt made his first fiscal statement in the role, outlining a range of tax measure...

End of Help to Buy: 10 alternatives for first-time buyers

The deadline for Help to Buy Equity Loan applications passed on 31 October. If you’re a first-time buyer who...

Moving to an energy prepayment meter: Everything you need to know

As households struggle with the soaring cost of energy, tens of thousands of billpayers are expected to move o...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week