Disposable income dropped below pre-pandemic levels in 2023

Disposable incomes fell last year to levels not seen since before the pandemic.

According to the latest data from the Office for National Statistics, household disposable income dropped by 2.5% to £34,500.

Key findings

When we dig deeper, the figures paint a mixed picture.

The median household disposable income for the poorest fifth of the population actually saw an increase of 2.3%, reaching £16,400.

While still 2.4% below pre-pandemic levels, this boost is partly due to government cost-of-living support measures.

Conversely, the richest fifth experienced a 4.9% drop in their median income, now at £68,400, which is 4.3% below pre-pandemic levels.

Between 2020 and 2023, median household disposable incomes decreased by an average of 0.3% per year. This is a stark contrast to the prior decade, where income annually rose by 0.8%.

Interestingly, the ONS data also shows the biggest drop in disposable income inequality since 2011.

Are you struggling with money?

While some households are benefiting from targeted support, others are feeling the pinch and it might be time to ask for support.

We can help get you back on track by creating a realistic budget, making sure you’re claiming all the benefits you’re entitled to and supporting you in applying for grants.

If you’re in debt, we can also advise you on possible solutions.

All the advice we give is free. Some of our debt solutions are free too, while others have a fee.

You can get in touch with us online or give us a call.