Month-to-month disposable earnings fell by £40 per individual between Boris Johnson’s election victory in December 2019 and Rishi Sunak’s defeat in July 2024.
Disposable earnings is the cash folks have left over after paying taxes and receiving advantages (together with pensions). Important bills like hire or mortgage funds, council tax, meals and vitality payments all must be paid from disposable earnings.
Beforehand printed figures confirmed a slight enchancment between December 2019 and June 2024, however these have been up to date by the Workplace for Nationwide Statistics on Tuesday.
There was an uplift within the final yr, though we’re poorer now than we have been initially of the yr, and at this time we solely have £1 extra on common to spend or save every month than we did on the finish of 2019.
That represents “an unmitigated disaster for living standards”, in response to Lalitha Strive, economist at unbiased residing requirements thinktank the Decision Basis.
Have issues gotten higher beneath Labour?
Disposable earnings has elevated by £41 per individual per 30 days since Labour took workplace in July 2024. Nonetheless, that masks a major deterioration in current months: it’s decrease now than it was initially of 2025.
Within the first six months of Labour’s tenure, disposable earnings rose by £55, a bigger improve than beneath every other authorities in the identical interval. Partially, this was right down to the pay rises for public sector employees that had been agreed beneath the earlier Conservative administration.
However the rise additionally represents a continuation of the trajectory from the ultimate six months of the outgoing authorities. Between December 2023 and June 2024, month-to-month disposable earnings rose by £46.
That trajectory reversed within the first a part of this yr, and the typical individual now has £14 much less to spend or save every month than they did initially of 2025.
“I clawed some back through (I know I would say this) hard work, and Labour tried to buy an instant boost through massive pay rises. The curious thing is why they have not fed through to the numbers.”
The £40 drop between Mr Johnson’s electoral victory in 2019 and Mr Sunak’s loss in 2024 is roughly the identical as the typical individual spends on foods and drinks per week.
By comparability, since 1955, when the info dates again to, residing requirements have improved by a mean of £115 per 30 days between parliamentary phrases.
Very important providers, issues like vitality, meals and housing, that each one must be paid for out of disposable earnings, have all elevated in worth at a sooner price than total inflation since 2019 as nicely.
Which means that the influence on financial savings and discretionary spending is more likely to be extra extreme for most individuals, and particularly so for decrease earners who spend a bigger proportion of their cash on necessities.
Responding to our evaluation, the Decision Basis’s Lalitha Strive stated: “Common family incomes fell marginally over the last parliament – an unmitigated catastrophe for residing requirements, as households have been hit first by the pandemic after which the very best inflation in a era.
“We desperately need a catch-up boost to household incomes in the second half of the 2020s, and to achieve that we’ll need a return to wider economic growth.”
Evaluation by the Joseph Rowntree Basis, which additionally takes into consideration housing prices, says that disposable earnings is projected to be £45 a month decrease by September 2029 than it was when Labour took workplace.
We approached each Labour and the Conservative Celebration for remark however each failed to reply.
How are Labour performing in different areas?
Labour have made “improving living standards in all parts of the UK” certainly one of their most important “missions” to attain throughout this parliament.
“Doing so will represent an improvement compared with the last parliament, but it doesn’t change the fact that we are in a period of real lack of growth over the last few years.”
Use our tracker to see how issues like tax, inflation and financial progress has modified since Labour have been elected.
The coverage areas we have now been monitoring embody immigration, healthcare, house-building, vitality and crime. You may see Labour’s efficiency on every of these right here.
