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Report reveals disposable income is down by £1000 over past three years

DISPOSABLE income for households in Britain has fallen by £1000 in three years since the downturn hit, official figures show, with those in work having lost more, £1500, and those in retirement having gained £190.

Just three days before the Chancellor's Autumn Statement, the Office for National Statistics (ONS) said since the economic downturn in 2008, median household income for the overall population fell by 3.8%, after adjusting for inflation.

The so-called "median equivalised disposable income" for non-retired households fell between 2009/10 and 2011/12 from £27,176 to £25,671, a reduction of £1505.

In contrast, the same income for retired households during the same period rose from £19,065 to £19,253, an increase of £188.

When all are taken together, income over the three years fell from £24,210 to £23,208, a £1002 reduction.

The ONS also looked at Britain's median disposable income across a much longer period from 1977. Between this date and 2011/12, it more than doubled from £11,200, using 2011/12 prices, to £23,200 by 2011/12. This meant an average yearly growth rate of 2.2%.

Taking the more recent period of 2007/8 to 2011/12, the median income for non-retired households fell by 6.4% while that for retired households grew by 5.1%. This is generally attributed to the benefits pensioners receive such as the annual winter fuel allowance as well as the annual upgrading of state pensions.

Over this period, income from employment and investments for the middle fifth of non-retired households fell from £37,900 to £32,600.

Labour's Catherine McKinnell, the Shadow Exchequer Secretary, said: "These figures show disposable incomes for the average working-age household fell by over £1500 a year in David Cameron's first two years.

"And after three damaging years of flatlining, the cost of living crisis under this government continues as prices are still rising much faster than wages."

She added: "That's why we need action in the Autumn Statement to tackle the rising cost of living and ensure we can earn our way to higher living standards for all and not just a few at the top.

"But with energy bills still rising this winter after the Government's announcements, David Cameron and George Osborne look set to fail the test."

In October David Cameron claimed Britain's disposable income was higher than it had been.

Labour denied this and pointed to an ONS report, saying that in the second quarter of 2013, real household disposable income was 0.7% lower than it was a year earlier.

But Tory HQ supported the Prime Minister, pointing out that over the last four quarters as a whole disposable income was higher than it had been under Labour.

Contextual targeting label: 
Local government

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