‘Most Brits feel disposable income dropped in last 12 months’

Most British consumers feel that their disposable income decreased ‘a lot’ in the last 12 months, stated a recent study.

According to data from YouGov’s new Financial Outlook 2023 global whitepaper from YouGov Profiles, two thirds of British consumers (67 per cent) feel that their disposable income decreased ‘a lot’ in the last 12 months. The same number (67 per cent) also feels that their disposable income is going to decrease ‘a lot’ in the next 12 months as well.

This is higher than Germany (66 per cent), France (64 per cent) and the US (52 per cent), and the fourth highest globally.

Britain also reports the highest proportion expecting to face further financial challenges in the year to come. Six in ten Britons (60 per cent) expect their disposable income to decrease in the next 12 months.

Overall, European markets have a more pessimistic view on future disposable income compared to the US and Mexico, and APAC regions.

Of the 18 countries included in the study, Britain’s spending power has been most impacted globally in the last 12 months. YouGov’s Discretionary Spend Index (DSI) finds it to have the highest negative impact score at -52 per cent.

Britain is closely followed by Italy (-49 per cent) and Poland (-46 per cent), while the US stands -36 per cent, all of which are higher than the global average of -35 per cent.

YouGov’s study findings comes weeks after it emerged that average disposable incomes fell by 3.8 per cent for the poorest fifth of households in the financial year ending 2022, but increased by 1.6 per cent for the richest fifth.

According to the Office for National Statistics (ONS), the average for the poorest fifth was £14,500, 3.8 per cent down on the previous 12 months, and for the richest fifth it was up to £66,000

Median household disposable income in the UK was £32,300 in 2021-22, marking a 0.6 per cent decrease compared with the previous financial year, based on estimates from the ONS Household Finances Survey.