Regional gross disposable household income, UK: 1997 to 2020

• In 2020, gross disposable household income (GDHI) per head in the UK fell 0.2% when compared with 2019; England fell by 0.2% and Northern Ireland by 0.5%, while Wales and Scotland reported increases of 0.9% and 0.3%, respectively.

• Of the countries and regions classified by International Territorial Levels (ITL1) in 2020, London had the highest GDHI per head where, on average, each person had £29,890 available to spend or save; Northern Ireland had the lowest at £17,301, which compares with a UK average of £21,440.

• GDHI per head of population increased in 7 of the 12 ITL1 countries and regions; the largest percentage increases were in the North East, North West, and Wales at 0.9%; the largest decreases were in London, South East, and South West at negative 0.9%.

• In 2020, Kensington and Chelsea, and Hammersmith and Fulham was the local area (ITL3) with the highest GDHI per head (£60,277), nearly three times the UK average; Nottingham had the lowest GDHI per head at £13,952.

• In 2020, the ITL3 local areas showing the largest increases in GDHI per head were Manchester (3.4%), Kingston upon Hull (3.0%), Nottingham (2.9%), and Liverpool (2.7%); the local areas with the largest decreases in 2020 were Westminster (negative 8.6%), Camden and City of London (negative 6.0%), Barnet (negative 2.2%), and Buckinghamshire (negative 2.1%).

UK total gross disposable household income (GDHI) in 2020 was £1.4 trillion. Of that, 86.4% was in England, 7.5% was in Scotland, 3.9% was in Wales and Northern Ireland had the lowest share of total GDHI in 2020 at 2.3%. When compared with the size of each country's population, only England had a GDHI per head above the UK average.

GDHI per head in the UK fell 0.2% between 2019 and 2020, from £21,475 in 2019 to £21,440 in 2020. Over the same period, GDHI per head in England and Northern Ireland fell by 0.2% and 0.5%, respectively. In Wales and Scotland GDHI per head increased by 0.9% and 0.3%, respectively between 2019 and 2020.

Table 1 provides an overview of GDHI for the four UK countries and International Territorial Levels (ITL1) regions. GDHI per head of population increased in 7 of the 12 ITL1 countries and regions. The largest percentage increases were in the North East, North West, and Wales at 0.9%. The largest decreases were in London, South East, and South West at negative 0.9%.

Notes:

1. Population estimates are sourced from Population estimates for the UK, England and Wales, Scotland and Northern Ireland: mid-2020.
2. Figures may not sum to totals as a result of rounding; per head (£) figures are rounded to the nearest pound sterling.
3. 2020 estimates are provisional.
4. Figures for the UK are consistent with those published in the UK National Accounts, The Blue Book: 2021.

When ordered by GDHI per head, three ITL1 regions reported a value above UK GDHI per head. These were: London, the South East and East of England (Figure 1). The lowest GDHI per head was seen in Northern Ireland.

At the International Territorial Level 3 (ITL3), the five places with the highest gross disposable household income (GDHI) per head in 2020 were all in London (Table 2), with their ranked order unchanged since 2019. The area with the highest GDHI per head was Kensington and Chelsea, and Hammersmith and Fulham where, on average, each person had £60,277 to spend or save. This is nearly three times the UK average of £21,440.

Despite this, GDHI per head fell between 2019 and 2020 in all of the top three areas. The largest declines across all ITL3 areas were in Westminster at 8.6%, and Camden and City of London at 6.0%, followed by Barnet at 2.2%, and Buckinghamshire County Council at 2.1%. This is, to a large degree, the result of falls in property income received, which fell 21.0% at the UK level, and in mixed income, which fell by 4.1%. These falls have disproportionately affected areas in London where the levels of property income (from investments and financial assets) and self-employment are high.

The ITL3 area with the lowest GDHI per head was Nottingham where, on average, each person had £13,952 to spend or save. However, in 2020, Nottingham saw the third highest increase in GDHI per head across all ITL3 areas at 2.9%, exceeded only by Manchester at 3.4%, and Kingston upon Hull at 3.0%. Other areas showing large increases include Liverpool at 2.7%, Leicester at 2.6%, Birmingham at 2.5%, and Blackpool at 2.5%. All of these areas have seen substantial increases in social benefits received, which grew by 6.3% at the UK level.

In the data tables published with this bulletin (Section 5) you can find a full breakdown of the income components flowing into and out of households, showing for each area which components are having the greatest impact on household finances.

At the ITL3 level, 95 of 179 areas saw an increase in GDHI per head between 2019 and 2020 (Figure 2). By comparison,175 of the 179 areas saw an increase in GDHI per head between 2018 and 2019. This change from the normal pattern of growth is driven by the impact of the coronavirus (COVID-19) pandemic, which affected local areas in different ways, depending on the composition of household income in each area. Westminster at negative 8.6%, and Camden and City of London at negative 6.0% can be seen as extreme outliers in the distribution.

It should be noted that GDHI figures include the effect of price inflation. Of the 179 ITL3 areas, 50 showed GDHI per head growth equal to or greater than the Consumer Prices Index including owner occupiers' housing costs (CPIH) annual growth rate of 1.0%. The remaining 129 ITL3 areas showed growth lower than the CPIH annual growth rate, which might be interpreted as a decrease in the real terms value of disposable income. However, it is important to recognise that the CPIH does not account for any regional variation in the cost of living.

Figure 3 allows users to explore how gross disposable household income (GDHI) per head has varied among local authorities between 1997 and 2020.

Figure 3: Gross disposable household income per head for UK local authorities, 1997 to 2020

Notes:

1. The City of London is not shown on the map because its GDHI per head is a large outlier value.

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Gross disposable household income (GDHI)

Gross disposable household income (GDHI) is the amount of money that all the individuals in the household sector have available for spending or saving after they have paid direct and indirect taxes and received any direct benefits. GDHI is a concept that is seen to reflect the "material welfare" of the household sector. The household sector includes residents of traditional households, as well as those living in communal establishments. GDHI also includes the business income of self-employed people.

International Territorial Levels (ITL)

International Territorial Levels (ITL) is the new UK geographies classification system. This has superseded the Nomenclature of Units for Territorial Statistics (NUTS) classification system. The ITL areas have initially been set to be an exact copy of the current NUTS areas for the UK.

Per head

Estimates can be divided by the resident population of a country, region, or area to give a value per head. This can be a useful way of comparing regions of different sizes. Because GDHI is measured according to the residence of the person, not their place of work, GDHI per head is not subject to distortion from commuting. It does, however, include the entire population of an area, including children and retired people.

Methodology information

Various guidance and methodology documents relating to regional gross disposable household income (GDHI) are available. The regional accounts methodology guide provides an overview of the methodology used to compile regional accounts outputs.

Methodology information on how the data were created and appropriate uses is available in the regional GDHI QMI.

A guide to sources of data on income and earnings is available outlining the different data sources and outputs that feed into the analysis of income and earnings within the UK. Further information on income and earnings statistics produced by the Office for National Statistics (ONS) and other government departments is also available.

Revisions

GDHI estimates in this release show revisions for the period 1997 to 2019.

Very few statistical revisions arise because of errors in the popular sense of the word. All estimates, by definition, are subject to statistical error but in this context the word refers to the uncertainty in any process or calculation that uses sampling, estimation, or modelling. Most revisions reflect either the adoption of new statistical techniques or the incorporation of new information, which allows the statistical error of previous estimates to be reduced.

Only rarely are there avoidable errors such as human or system errors and such mistakes are made clear when they are discovered and corrected.

In this release we have introduced further enhancements to the processing of local authority areas, continuing the development of these lower-level estimates. We have split several of the broad components of income into more detailed sub-components, so that we can make better use of new data sources that have become available at this level of geography. The most marked change is to the social benefits component, where we have obtained value data for all local authorities from the Department for Work and Pensions.

Users can monitor revisions to the published figures over time via the regional GDHI revisions triangles.

Coronavirus (COVID-19) impact

In this release we are seeing the impact of the coronavirus (COVID-19) pandemic on regional gross disposable household income (GDHI) for the first time.

The pandemic has affected the components of GDHI differently and this is reflected in some unusual movements in the data for 2020, particularly when looking at smaller geographical areas.

National Statistics

Data included in this release are designated as National Statistics, which means they have been assessed by the Office for Statistics Regulation as fully compliant with the Code of Practice for Statistics.

Quality information

Figures for 2020 are provisional as national estimates have not been through supply and use balancing at the time of this publication.

Quality information on the strengths and limitations of the data is available in the regional GDHI QMI.

The figures in the accompanying datasets are all in current prices, which include the effect of price inflation, and are consistent with those published in the UK National Accounts, The Blue Book: 2021.