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The News Line: News Living Standards collapsing! – as disposable income plummets LIVING standards are collapsing for the majority of people in Britain today, with individuals having less disposable income to spend on average in the first three months of this year than during any quarter since 2003.

The Office for National Statistics (ONS) reported yesterday that disposable income per head, taking inflation into account, fell by 1% on the previous quarter.

This measure of income is the amount of cash individuals have to spend after tax.

At the same time, savings levels dropped as families felt the squeeze.

The ONS figures show that real household actual income per head, before tax and services provided by the state, fell by 0.6% in the first three months of the year, compared with the previous quarter and this was the lowest level since the second quarter of 2005.

The increase in prices over this period eroded the growth of household income, the ONS said, while income, primarily from pay, weakened.

A number of firms have frozen pay because of the financial situation in the UK, while public sector workers, following years of pay freezes have widely seen below inflation pay rises (cuts) imposed on them.

‘Finally, sustained population growth led to incomes being spread across a greater number of people, and therefore further reduced the growth of actual income per head,’ the ONS said, in its report on the economic position of households.

Estimating on average that people have a disposable income of £273 a week, the ONS figures showed families were cutting their spending and saving levels.

Real household actual expenditure fell in the first three months of the year to its second lowest level since the third quarter of 2003.

A couple with two children need to earn £36,800 a year to have a ‘socially acceptable’ standard of living, an anti-poverty charity the Joseph Rowntree Foundation said last week.

Its annual minimum income study suggested families must earn a third more than in 2008, to live within social norms.


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