Median household disposable income in the UK 1994-2022
In 2021/22 the median annual household disposable income in the United Kingdom amounted to approximately 32,350 British pounds. Between 1994/95 and 2007/08 the average household disposable income showed year-on-year increases, but after this point, income levels began to stagnate and even decline in some years. Although average household disposable resumed a steady growth pattern between 2012/13 and 2016/17, it has fluctuated in more recent years.
Economic shocks and disposable income
The steady growth of disposable income from 1994 to 2008 reflected the generally healthy UK economy in that period. After the global financial crisis, however, the UK economy was plunged into a deep recession that is mirrored by a decline in disposable income. Although there was a period of recovery between 2013 and 2016, the UK economy has suffered a series of economic shocks since that point. The Brexit Referendum of 2016, and the subsequent economic and political fallout, was followed by the COVID-19 pandemic in 2020, and in more recent years by the Inflation Crisis and Ukraine War.
Living costs putting UK households under pressure
Between January and April 2022, the share of people reporting an increase in their living costs compared with the previous month rose from 66 percent to 91 percent. This corresponded with significant price increases at that time, with CPI inflation surging from 0.4 percent in February 2021 to a 41-year-high of 11.1 percent by October 2022. Although inflation did gradually start to decline in the following months, it wasn't until July 2023 that wages caught up with inflation. The surge in energy and food prices that caused this high inflation, was devastating for UK households, leading to the worst Cost of Living Crisis for decades.
