UK disposable income drops nearly a quarter

Britons’ disposable income has fallen by almost a quarter since last year as consumers spend more of their earnings on bills, groceries and housing, a survey suggests.

The average consumer’s disposable income has fallen from £426 to £326 a month in the last 12 months, a drop of 23%, according to the VoucherCodes.co.uk annual cost of living life barometer.

The amount is in sharp contrast with the average £471 a month Britons predicted they would have available to spend on non-essentials at the start of the year.

Total pay in real terms sank by 0.7% in the three months to May in contrast to last year, according to ONS figures published last week.

The research found 18 to 34-year-olds currently have £325 spare cash to spend at the end of each month after paying for bills, rent and other essentials compared with last year’s average of £456.

Over-55s have also seen a drop from £425 last year to £322, the poll found.

Men still enjoy a larger disposable income with £370 a month to spare – 28% more than women who have just £288 left in their accounts after paying bills, although this appears to be closing from last year’s gap of 32%.

Meanwhile, spending on apps for mobile phones and tablets is up by 227% on last year, while consumers are spending 215% more on gambling, the report said.