Two-thirds of households saw flat or falling incomes over the past 12 months
The Ipsos MORI survey of over 2,000 bank account holders in the UK, shows 36% of working households have seen no change in their household’s income, while 17% of consumers have seen a decrease in income.
The hardest hit are those working in the public sector (19%), earning up to £34,999 (19%), or above the age of 35 (19%). They may receive some respite following the announcement of a new pay deal for NHS workers this week.
Household income has come under pressure from rising living costs over the period. Lloyds Bank analysis of its own customer account data has found 3% year-on-year growth in consumers’ essential spending (data to February). The group reported a rise in gas and electricity spending of over 5% year-on-year, the seventh consecutive month of spending increase.
In spite of some weakening of inflation in February’s statistics, those surveyed are increasingly negative compared to last year about inflation (up 6 percentage points) and the country’s financial situation (up 5 percentage points).
The Lloyds Bank research also shows homeowners at a disadvantage over renters. Homeowners have experienced larger decreases in household income over the past 12 months. Of those who claim their household income has deteriorated, nearly 1 in 4 (23%) homeowners believe it has reduced by more than 20%, whereas only 16% of renters report reductions of the same proportion.
Robin Bulloch, managing director of Lloyds Bank, said: “While consumers will have been pleased to see the gap closing between inflation and wage growth in February, our research shows that UK households still feel they have been under real financial pressure in 2018. Inflation remains high, and people are having to make their money go further as a result of muted household income growth.”