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Average disposable income in the UK per month

According to estimates from the Office for National Statistics (ONS), the average disposable income in the UK per household, for the year ending 31st December 2022 was £32,300. However, for the second year, it increased by only 0.7%, as opposed to the previous ten years, which showed an annual increase of 1.7%.

What counts as disposable income?Money that is used to pay rent, utilities, food, clothing, insurance, etc
Does disposable income have an impact on the economy?Definitely. It is used as a measure of economic health
Can disposable income impact a person’s ability to save for retirement?Absolutely
Does disposable income vary between different regions of the UK?Unfortunately, there is income inequality between regions

What is a good amount for disposable income?

A good disposable income amount would be enough to enjoy a good standard of living and leave some money over for saving or investing. But with the cost of living rising as much as it has over the past few months, fuelled by the highest inflation figures since the 1980s, most UK households are finding out that they need more before they consider it a good amount.

Even though inflation is falling, it comes as scant relief for many households, as reported by the FT. This is because prices are still rising faster than wages. In fact, the annual rise in food prices as of the end of July 2023 was 14.9%, putting even more strain on disposable income.

How is disposable income calculated in the UK?

The average disposable income UK figures are calculated by taking the earnings from employment, income from investments and personal pensions, and any cash benefits provided by the UK government and deducting any direct taxes.

What is the average disposable income in the UK per month?

The average disposable income in the UK per month has been on the rise since 2003. According to the UK Government, the average weekly disposable income in the UK was £539  in 2021. This means that the average disposable income per month was £2,156, and around £28,100 per year. This figure is the median household income before housing cost has been deducted. The average income per month after housing costs swas reduced from £2,156 to £1,888 per month, and around £24,600 per year.

According to Family Source Survey, in the 3 years to March 2021, 45% of households in the UK had a monthly income of below £2,400, 30% of households had a monthly income of £4,000 or more, and 7% of households had a monthly income of £8,000 or more. These figures are before tax has been deducted.

What was middle-class income in the UK in 2022?

According to, the middle-class salary in the UK for 2022 was £26,800 per annum. Of course, the figures swing wildly depending on geographic region. While £35,000 was considered the minimum in the North, £60,000 was the minimum for London.

Average salary vs cost of living in the UK

With inflation still high, the average salary is failing to keep pace with the cost of living. When measured by the ONS between October and December 2022, in real terms, total pay (including bonuses) fell behind by 3.1%, while regular pay dropped by 2.5%. The drop might be smaller than the record drop of 4.5% between February and April 2009, but it still registers as one of the most significant drops since 2001, since comparable records started.

Income Distribution Across Different Age Groups

Income distribution across different age groups in the UK reveals a complex pattern that reflects various stages of life and career development. In general, younger individuals, particularly those in their early 20s, tend to earn less as they are often in entry-level positions or pursuing education.

As individuals progress into their 30s and 40s, they typically experience a rise in earnings, reflecting career advancement and increased experience. This trend often peaks in the late 40s to early 60s, where many reach the height of their earning potential.

The average disposable income in the UK then tends to decline as individuals transition into retirement, with many relying on pensions and savings. Understanding this age-related income distribution is essential for policymakers and economists, as it provides insights into economic well-being, social mobility, and the effectiveness of various financial support systems across different life stages.

Which cities in the UK have the highest and lowest living costs?

A quick look at the list of “The richest and poorest cities in the UK” reveals that while London has by far the highest average monthly salary rate at £2,410.86, it also shows that at £2,149.89 per month, it not only has by far the highest monthly costs, and the lowest remaining income, at a mere £260.97 per month.

Aberdeen is the top city in the UK, with the second-highest average monthly salary rate of £2,278.66, the second-lowest monthly costs at £780.84, and the most remaining income at £1,497.82.

You can check out the full list on the

Trends in disposable income over time

Looking back over the past 10 years, there has been continual growth in the average disposable income in the UK, which indicates that people have the opportunity to develop an investment strategy.

One way of increasing UK household disposable income is investing for income – additional income, that is.

Another path for people looking to increase their average disposable income in the UK per month is to start up a side business of their own. According to BBC news, the first year of the COVID pandemic saw an 8% increase in new start-ups.

Those deciding on this course of action can take advantage of the trading income allowance scheme whereby you’re entitled to tax rebates on earnings under £1,000.

Whatever it is you may decide to invest in – a start-up, a sideline, or one of the various types of ISAs; it’s crucial to get your financial planning right. Even with the average discretionary income in the UK rising, it’s still important to have some savings tucked away for emergencies or unforeseen circumstances.

Comparison with other countries

Unfortunately, when comparing the average disposable income in the UK with that of other nations, we are not doing as well as one might hope.


2021 Disposable income per household/capita


Source:Wikipedia: Data from OECD.

Data from 2021 shows that the UK is not even in the top 10. The UK came in 14th place with a PPI of 36,900.

Why is disposable so important?

How much disposable income you have governs the lifestyle you can live and your ability to save and/or invest. Investing for the future may seem insignificant, especially in your 20s. But as life progresses, the importance will become more apparent – especially for retirement.

Retirement is a fact of life that most of us will come face-to-face with one day. Having the average expendable income in the UK (the same as the average disposable income) might mean you can achieve the average retirement income, but will it be enough? Taking your state and any workplace pensions into account, you still might be left short of your ideal retirement income.

Have you considered investing?

Leftover funds from the average disposable income in the UK can be put towards investing. However, knowing how to invest money can not only protect your savings against erosion due to inflation, it can help you to save towards things like buying your first property, seeing your kids through university, and helping to ensure a decent retirement income – even if you only match the average household disposable income here in the UK.

Workplace pensions and other personal pensions, including SIPPs, are ideal for retirement savings but have one drawback. Your money is tied up until you reach state pension age. Yes, you can access 25% tax-free when you reach 55, but you might not want to, as it will detract from your final pension pot.

ISA Tax Wrappers

A stocks and shares ISA has all the benefits of a pension because it’s a tax wrapper, and you can access your pot when necessary. People may think that a stocks and shares ISA is the best ISA, as it can be structured to provide a boost to an average disposable income here in the UK. Not only that, but being a tax wrapper, the interest (including dividend payments) earned from an ISA is tax-free.

But it is very much down to the individual. Investments carry risk. The value of funds in your account can fall as well as rise. But bear in mind – that is no different to most defined contribution workplace pensions or SIPPs.


What is disposable income?

Disposable income is the amount of money an individual or household has available to spend or save after taxes, and mandatory deductions have been paid.

What factors can affect the average disposable income in the UK?

Some factors can impact an individual’s or household’s disposable income. The factors include income level, location, employment status, age, and family size. In addition, other economic factors, such as the cost of living and inflation, can also impact disposable income.

How can I increase my disposable income?

There are several ways to increase your disposable income. First, you can earn more money by negotiating a higher salary, getting an additional job, or starting a side business. You can reduce your expenses by lowering utility bills, finding affordable housing or transportation options, and limiting unnecessary spending. You can also reduce your tax liability. Finally, paying off any debt will reduce your monthly expenses. Budgeting and managing expenses more effectively can also increase disposable income.

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*Capital at risk. Tax treatment depends on your individual circumstances and may be subject to change in the future.