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Exploring the gap in regional household disposable income

Geoff Riley

13th October 2022

I suspect many Economics teachers have been using the concept of disposable income with great frequency in recent weeks. Most forecasts predict that in 2022-2023, there will be a significant fall in real household disposable income with wages failing to keep up with prices and with recent tax rises (such as fiscal drag from freezing income tax allowances) having a significant effect. New data from the ONS highlights the huge regional and sub-regional divide in household disposable incomes per head.

In 2020, London had the highest GDHI per head where, on average, each person had £29,890 available to spend or save; Northern Ireland had the lowest at £17,301, which compares with a UK average of £21,440.

Then if we look deeper into the figures, we find that Kensington and Chelsea, and Hammersmith and Fulham topped the table - on average, each person had £60,277 to spend or save. Of course, any average figure hides deep-rooted inequalities within regions and localities.

In Nottingham, on average, each person had £13,952 to spend or save. Leicester was just above.

This inequality within the UK is deep-rooted and a key element of the politically contentious debate over levelling up and whether the current government have really every committed to paying more than lip service to addressing regional inequalities not just of income but of consumption, employment opportunities and chronic educational and health divides.

The ONS have published an interactive map that allows you to choose a location and see what has happened to household income per capita.

Here is the link

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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