‘Pound in the Pocket’ Falls
Posted on 15 August, 2010 at 3:52 by Peter Kelly
Over the past 4 years, disposable income has fallen by a sixth, due to the increase of house prices, mortgage repayments, fuel costs and other household bills. Disposable income is the amount that you have left after all essential payments have been made, this money would be left over for making savings or purchasing non-essential items.
Research from Ernst & Young Accountants suggests that only 22% of the average income is left over after all essential payments have been made, which is down from 28% in 2004. Additionally, they report that the average household has seen their disposable income – “the pound in their pocket” – drop by 17.5%.
Tim Sleep, director of retail at Ernst & Young, said: “Big rises in household costs continue to outstrip wage inflation… The consumer is being squeezed from many directions.”
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