The document analyzes the changes in financial situations of UK households over the past decade, highlighting trends in income, spending, saving, and borrowing. It notes that disposable income per head has increased slightly post-Brexit compared to 2007, but income inequality has widened, with richer areas seeing greater gains. Additionally, while household spending has risen, savings rates have declined significantly, and overall debt levels are higher than income, although the gap has narrowed since the recession.

1. Economic living standards
in the UK
How the financial situation of households
has changed in the last decade
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2. Our financial situation -
levels of personal and
household income,
spending, borrowing and
saving - greatly affects
our standard of living Ms.Statistics
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3. The UK economy has seen a lot of change in the last
10 years, from the recession to the Brexit vote,
but how has our financial situation
been affected?

4. Income, Spending, Saving and Borrowing
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5. After taking price changes into account, disposable income per head
was just 2% (around £100) higher in the year following the Brexit vote
compared with 2007*
Quarterly real disposable income per head, UK, 2007 to 2017
Source: UK Economic Accounts, ONS
*The year since the Brexit vote refers to the period from Quarter 3 2016 to Quarter 2 2017.
2007 refers to the period from Quarter 1 to Quarter 4 2007.
Income
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4,100
4,200
4,300
4,400
4,500
4,600
4,700
4,800
4,900
£
'17 Q1'16 Q1'15 Q1'14 Q1'13 Q1'12 Q1'11 Q1'10 Q1'09 Q1'08 Q1'07 Q1
Brexit voteRecession

6. The richest areas have seen their income rise by more than the poorest.
The difference between the area with the highest and lowest income
per head widened by nearly a third between 2007 and 2015
Annual gross disposable income per head, 2007 and 2015
Source: Regional gross disposable household income, ONS
Income
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0 10000 20000 30000 40000 50000 60000 £
Kensington, Chelsea, Hammersmith and FulhamNottingham
2007
Difference: £30,998
£11,079
£12,779
£42,077
£52,298
Difference: £39,519
2015

7. Changes in spending have
a major impact on
economic growth:
household spending made
up 63% of GDP in 2016
Spending
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8. Our spending has edged above its pre-recession level in the last year.
A typical person spent £49 (1%) more per quarter,
on average, in the year following the referendum than in 2007
Quarterly real spending per head, UK, 2007 to 2017
Source: UK Economic Accounts, ONS
Spending
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3,800
4,000
4,200
4,400
4,600
4,800
£
'17 Q1'16 Q1'15 Q1'14 Q1'13 Q1'12 Q1'11 Q1'10 Q1'09 Q1'08 Q1'07 Q1
Brexit voteRecession

9. While income and
spending have increased
in the last 10 years, what
we have available to save
has dropped in that period
Saving
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10. An average household had 5.4% of their income available to save
in the year following the Brexit vote, down from 8.2% in 2007
Households' saving ratio, UK, 2007 to 2017
Source: UK Economic Accounts, ONS
Saving
0
2
4
6
8
10
12
14
%
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Brexit voteRecession

11. We save much less of our income than households in France and Germany
and only slightly more than the US, where savings are traditionally low
International comparisons of the households' saving ratio, 2007 to 2017
Source: UK Quarterly Sector Accounts, ONS
*German data is annual rather than quarterly, and includes non-profit institutions
serving households as well as households.
Saving
0
2
4
6
8
10
12
14
16
18
%
UK
France
USA
‘17 Q1‘16 Q1‘15 Q1‘14 Q1‘13 Q1‘12 Q1‘11 Q1‘10 Q1‘09 Q1‘08 Q1‘07 Q1
Germany

12. The fall in savings has
coincided with a return to
high borrowing seen
before the recession,
particularly in the form of
consumer credit
Borrowing
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13. The amount of consumer credit (excluding student loans)
reached its pre-recession level in Quarter 3 (July to September) 2017
Amount of consumer credit (excluding student loans), UK, 2007 to 2017
Source: Bank of England
Borrowing
150
160
170
180
190
200
210
£ billion
'17 Q1'16 Q1'15 Q1'14 Q1'13 Q1'12 Q1'11 Q1'10 Q1'09 Q1'08 Q1'07 Q1
Brexit voteRecession

14. Meanwhile, growth of mortgage lending has picked up in recent years,
but remains well below the levels seen before the recession.
Growth rate of mortgage lending (quarter on quarter a year ago), UK, 2007 to 2017
Source: UK Economic Accounts, ONS
Borrowing
0
2
4
6
8
10
12
%
'17 Q1'16 Q1'15 Q1'14 Q1'13 Q1'12 Q1'11 Q1'10 Q1'09 Q1'08 Q1'07 Q1
Brexit voteRecession

15. Overall, our debt is higher than our income, but the gap has closed since
the recession. On average, debt was 31% higher than income in the year
following the referendum, compared with 45% in 2007
Household debt to income ratio (four quarter rolling sum), UK, 2007 to 2017
Source: UK Quarterly Sector Accounts, ONS
Borrowing
100
105
110
115
120
125
130
135
140
145
150
Debt as a % of income
'17 Q1'16 Q1'15 Q1'14 Q1'13 Q1' Q1'11 Q1'10 Q1'09 Q1'08 Q1'07 Q1
Brexit voteRecession

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