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Household Disposable Income Across the UK, 2010 This product is designated as National Statistics

Released: 13 July 2012 Download PDF

YouTube video summary

A podcast explaining this story using audio commentary and graphical animations is available on the ONS YouTube channel.

It shows:

  • London had the highest household income per head, nearly 30 per cent higher than the UK average. The lowest disposable income was in the North East, 15 per cent lower than the UK average. 

  • Looking at a more local level, Inner London West had the highest disposable income, at £33,323. The lowest was in Nottingham, at £10,702.

  • Finally it shows how income is split up into that obtained from primary income, mainly wages and salaries and that from secondary income, mainly benefits received and taxes paid.

Disposable household income over fifty per cent higher in London than the North East

In 2010, across the UK as a whole the average disposable household income per head (which in simple terms is income after taxes and benefits) stood at £15,709. There were big variations across the country with London having the largest amount, £20,238, which was 51.8 per cent higher than the lowest, the North East at £13,329.

Three English regions had a higher disposable income than the UK average; London, the South East and the East of England. All other UK regions fell behind the UK average.

Disposable income per head across the UK, 2010

Disposable income per head across the UK, 2010
Source: Office for National Statistics

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

Disposable income slowed across almost all regions during the recession

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, if we look at the rate of growth in disposable income, it slowed across almost all regions between 2008 and 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 per cent and 0.2 per cent 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 per cent growth in 2008 to 0.4 per cent contraction in 2009.

Factors affecting this slow down 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. 

Disposable income in Inner London West is more than twice the UK average

Looking at a more local level, 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 per cent 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. The second lowest area was the City of Kingston upon Hull at £11,149.

Disposable income per head in local areas

Disposable income per head in local areas
Source: Office for National Statistics

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Over the period 1997 to 2010, the City of Kingston upon Hull has grown at a greater rate than Nottingham, outperforming it in terms of ranking from 2003 onwards. Nottingham had the slowest rate of growth between 1997 and 2010 at 37.7 per cent. The fastest growing area across this period was the Orkney Islands in Scotland, at 112.8 per cent. 

Components of disposable income

Household disposable income is calculated as primary income plus secondary income. Primary income shows the income received by individuals for their role in the production process (wages and salaries) and also rent, dividends and interest received and paid. Secondary income shows how primary income is redistributed by receipts of benefits and payments of taxes and social contributions, for example national insurance.

Primary and secondary incomes as percentages of each regions total disposable income, 2010

Primary and secondary incomes as percentages of each regions total disposable income, 2010
Source: Office for National Statistics

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London’s disposable income is driven by wages and salaries

London is the region where the highest proportion of disposable income comes from primary income, at 125.4 per cent. This indicates that London gained a higher proportion of its total disposable income from wages and salaries than any other UK region. The second highest contribution of primary income to total disposable income was made by the South East at 114.3 per cent. The contribution of primary income to total income in these regions is greater than 100 per cent due to the deductions of taxes and social contributions at a later stage in the calculation of disposable income.

Three regions earned a positive amount of their total disposable income from secondary income. Wales, Northern Ireland and the North East, earned 4.2 per cent, 2.6 per cent and 0.6 per cent respectively of their total disposable income through secondary income. This could be attributed to these regions earning a greater proportion of their total disposable income from social benefits, and that individuals in these regions are also paying less in taxes and social contributions due to lower wages and salaries.

Interactive maps

Animated maps showing Regional Gross Disposable Household Income (GDHI), in £ million and as £ per head values, are available on the Neighbourhood Statistics website.

Background notes

  1. The analysis uses estimates from the Regional Gross Disposable Household Income release.

  2. These estimates relate to the household sector which comprises all individuals within an economy, it should therefore be noted that this analysis focuses on the disposable income of individuals rather than households. The figures quoted in this analysis are based on estimates of disposable income per head of population.

  3. Data are presented on a per head of population basis. This allows the analysis to compare regions of different sizes.

  4. The estimates presented in this analysis are headline figures, which are calculated using a 5 year moving average to remove volatility.

  5. The figures are presented for areas according to the European classification of Nomenclature of Units for Territorial Statistics (NUTS).

  6. A full range of variables for Regional GDHI is available on the ONS website.

  7. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

Content from the Office for National Statistics.
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