NEWS5 February 2019

Pessimistic outlook despite rise in earnings and employment

News Public Sector Trends UK

UK – Income and spending increased for UK households last year but people’s perception of the future worsened, according to an analysis of personal and economic wellbeing by the Office for National Statistics (ONS).

Sad coffee face_crop

In its report Personal and economic wellbeing in the UK the ONS has brought together data on both personal and economic wellbeing for the first time.

The data collected between October 2017 and September 2018 in the UK found that income and spending continued to increase in the latest quarter, but longer term, there is a slowdown in household conditions with people’s personal wellbeing levelling off and their perception of the future declining.

Between July and September 2018 there was an increase in real household disposable income per head, up 0.7% compared with a year ago, with similar increases in earnings, employment and household spending and improved anxiety ratings.

Managing personal debt appears to be becoming a bigger problem with household debt increasing and now accounting for 133% of disposable income. In addition, spending per person is outgrowing disposable income by £119.

The economic picture is not evenly distributed across the UK – between 2011 and 2016 financial years, average income for the bottom 20% of households increased by 4.8% or £589 while for the top 20% it increased by 6.7% or £4,123.

Glenn Everett head of inequalities at the ONS said: “Despite high levels of employment, rising incomes and spending across UK households, people are not reporting increases in their well-being. This may be due to worries about rising debt repayments, which could be driving concerns about their future financial situation.”

The ONS has developed and analysed a wider range of measure to extend beyond traditional gross domestic product (GDP) economic indicators, to better inform policy. Its ‘Beyond GDP’ initiative focuses on sustainable economic, human and environmental wellbeing.

It defines ‘well-being’ as ‘how we are doing’ as individuals, as communities and as a nation, and how sustainable this is for the future. For example, the ONS measures include how people assess their own life satisfaction and happiness, alongside measures of household wealth and disposable income.