Richest and poorest in the UK

Map of the British Isles made out of coins

There are two striking trends from data published this morning on regional gross disposable household income (stay awake) - or how much spending power people have in different parts of the UK.

The first is that London continues to power away from the rest of the UK in respect of its prosperity.

And the second is that Scottish people have not fared too badly from being part of the union since 1997 (the start date for the stats published today - and I immediately add, in deference to the passionate debate over independence, that the past is of course no guide to the future).

So Londoners were on this measure 27.7% richer than the average UK person in 2012, up from 27.6% richer in 2011 and 22.4% richer in 1997.

Or to put it another way, the income gap between London and the rest has been widening.

What is remarkable, perhaps, is that every other part of England (England, not the UK) has become relatively poorer since 1997.

Even South-Easterners became poorer - although they remain 14% richer than the UK average.

The poorest part of England - and the second poorest part of the UK - is the North East, where individuals' gross disposable household income per head is £14,393, compared with £21,446 in London.

That said, there was a bit of a catch up in the North East between 2011 and 2012.

City of London view London is continuing to power away from the rest of the UK in respect of its prosperity

Anyway, perhaps this relative decline of the English regions is another relevant factor in the rise of UKIP.

But when it comes to whether people feel the mainstream UK parties are serving their interests, it is not just longer-run personal income trends that seem to matter.

For example, Scots have become a bit richer per head since 1997 - when their disposable income was 94.7% of the UK mean, compared with 96.9% today.

And although Scots are considerably poorer than Londoners, they are richer than those in every part of England except the East, South East and South West.

But, to state the obvious (as I so often do - sorry), the relative progress of Scotland has not in any sense stemmed rise of the SNP or the appetite of some Scots to break away from the UK.

There has also been a bit of catching up by households in Wales and Northern Ireland - although households there remain in the bottom three for disposable incomes per head.

Shopping bags Spending is more important to people's happiness than their incomes, ONS research suggests

It is also worth looking at the composition of incomes in different places.

In London more than 83% of disposable income comes from what the ONS calls primary resources, which are largely wages and salaries, income from self-employment, income from savings and investments and rents from properties.

Or to put it another way, Londoners have relatively low financial dependence on benefits and transfers from the state; they are relatively financially independent.

What is more, since 1997, Londoners have become self-supporting to a slightly greater extent.

By contrast, pay and the fruits of saving have been a declining proportion of disposable incomes in every other part of the UK; transfers from the state have become more important everywhere apart from London.

In Scotland, for example, primary resources were 76.1% of total resources in 1997, and fell to 73.4% in 2012.

Which implies that Scots have become more reliant on state support - although the extent to which that support has implicitly come from south of the border is hotly debated and changing, and is connected to the varying flows of tax revenues lifted from oil in Scottish waters.

That said, it is difficult to argue that Scots people have derived no income benefit from being part of the UK - although that does not say a great deal about one important question, which is whether there is a culture of financial dependence in Scotland that would be replaced by one of entrepreneurialism by separation.

Here are two other points.

A separate bit of analysis by the ONS indicates that spending is more important to people's "life satisfaction" and happiness than their incomes: what we do with our money appears to matter more to our own sense of wellbeing than what we earn.

And, for those who like league tables, the very richest bit of the UK is "inner London west", where gross disposable incomes per head are £36,963 - which is well over three times the £11,411 they have available to spend in the poorest place, Nottingham.

Robert Peston Article written by Robert Peston Robert Peston Economics editor

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  • rate this

    Comment number 22.

    Think some people are confusing disposable income with dispensible income. Disposable income as discussed in the article is what you have left after taxes - but before rent, etc. Discretionary income is money in your pocket "at the end of the month" i.e. after taxes AND after life's necessities of rent, food etc.

  • rate this

    Comment number 21.

    "That said, it is difficult to argue that Scots people have derived no income benefit from being part of the UK -..... by separation."

    you should rephrase that whole section. The way you have constructed makes it very difficult to understand what you're trying to say, or imply.

  • rate this

    Comment number 20.

    " What is remarkable, perhaps, is that every other part of England (England, not the UK) has become relatively poorer since 1997. "

    Household bills rising much faster than earnings ? Zero hours contracts ?. Not sure why you would find that so remarkable Robert.

  • rate this

    Comment number 19.

    Basically, we need strong regional centres to 'up their game' and start closing the gap with Londons productivity in order to close the wealth gap. Taking productivity away from London makes everyone in the UK poorer, so come on the regions - pull yer fingers out

  • rate this

    Comment number 18.

    Basing a report on just income, without looking at costs is a bit one sided. London does enjoy better income, but their homes are far more expensive.

    The last Government, a number "not so hidden" taxes hit the regions, eg fuel taxes hit people who have to drive more, but do not hit London (or non driver Gordon Brown).

    Governments should be careful of the regional effects of their policies.

  • rate this

    Comment number 17.

    The majority of the population in London and the big cities are tenants who are suffering from high rents..
    Suspect that this study did not include rents in the disposable income???

  • rate this

    Comment number 16.

    This whole article could be replaced by a single table, which would make it much more easy to analyse.

  • rate this

    Comment number 15.

    Its all based upon use of "averages" which themselves pervert & distort statistics beyond recognisable or relevent meaning to most people.

    As if adding a few millionaires incomes to lowest incomes & then creating a fantasy number is enough to convince anyone of anything but the reality that they EXPERIENCE.

    Life is now far too complicated to use "average" figures to show anywhere NEAR truth

  • rate this

    Comment number 14.

    Best argument for high speed rail links to London.

    If you can't beat 'em, join 'em.

  • rate this

    Comment number 13.

    I suppose I could have headed to London when I graduated 25 years ago but it never appealed to me maybe my talent far outweighed my ambition but at the end of the day preferred life in my own county to the hell hole that is London money is not everything quality of life is better in the North.

  • rate this

    Comment number 12.

    It's telling that London is by far the richest area, despite having some of the most deprived areas in the UK. This isn't wealth to benefit all - the poor in London are just as poor as those in Nottingham, but it gets covered up by the rosy headline figure showing London to be "rich".

  • rate this

    Comment number 11.

    There are not enough professional job opportunities outside of London. I believe the government should invest in low corporate tax zones around the country and draw corporations out of the M25. Would help with London house prices too.

    When my father wanted to progress his career as a Civil Engineer, we all moved from Yorkshire down to London, as that is where all the big consultancies are.

  • rate this

    Comment number 10.

    what mr peston fails to mention is that the relative improvement in the figures for Scotland have been achieved largely in part to the SNP policies applied as part of the Holyrood Parliament - and my firm belief (and hopefully that of others!) is that this 'improvement' would be magnified with independence whilst Westminster has NOT provided any specific policies related to this 'improvement'

  • rate this

    Comment number 9.

    London gets more infrastructure subsidies than most of the rest of the UK combined - circa £5k per captia

    There is no surprise that London properties & jobs are so costly.

    But why should the rest of the UK continue to fund the lifestyle of the few ?

  • rate this

    Comment number 8.

    um its getting richer in London and pooer in the rest, the financial gap is worse then it was pre-recession

    the rich and powerful caused this disaster for the country, any fair society would have seen to a slight rebalance of financial wealth but no the rich used it to make themselves even richer

    Lab may have caused the recession but tories are the ones who used it to benefit their pals only...

  • rate this

    Comment number 7.

    I'd quite like to see this data measured up against the statistics for the diagnoses of stress and depression in each region...

  • rate this

    Comment number 6.

    The poorest place has an average disposable income of £11,411. Really? The money advice service reported that 1 in 11 Britons has less than £10 a month disposable income in November 2013.

  • rate this

    Comment number 5.

    I agree with Boffin, having worked for a national company those in the North enjoyed a far better lifestyle even though they were paid slightly less due to London allowance. For me the article has missed the point.

  • rate this

    Comment number 4.

    And I bet if the map was of just "Greater London" we'd find some area's there powering massively ahead while the rest get left behind too.

    I wonder which area's they may be.....

  • Comment number 3.

    All this user's posts have been removed.Why?


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