Families £700 richer than 2015 thanks to pension ‘lock’

BRITISH families have never been better off, figures published yesterday suggest.

Disposable household income has hit a record high – thanks in part to the Government’s triple lock on state pensions boosting spending power for the elderly.

Families now have an average of £26,400 to spend each year, up £700 on 12 months earlier.

This is £400 above the previous high of £26,000 in 2007-08.

It means Britain has finally made up all the ground lost since the global financial crisis, when inflation and recession forced consumers to cut back significantly.

However, the growth was chiefly driven by retired households. They have an average £21,500 of disposable cash, £1,700 more than before the crisis. The so-called

Earnings buy more each year

triple lock, introduced by the coalition government, means the state pension rises each year by whichever is highest – price inflation, wage growth or 2.5 per cent. At a time when wages have stagnated and inflation barely moved, pensioners have seen their earnings steadily buy more each year.

However, working-age households still have less money to spare than before the crash. Their average disposable income is £29,200 – £400 less than its previous peak, the Office for National Statistics figures showed.

Meanwhile, a separate study suggested economic confidence was returning after a knock following June’s Brexit vote.

Markit’s Household Finance Index asked families about their opinion of the year ahead.

It came in with a reading of 49.8 in August, up from July’s two-anda-half-year low of 47.1. However, this is still below the benchmark of 50 – indicating an overall deterioration of household finances.

Further research by Lloyds Bank suggested investor confidence was also bouncing back.