Household income, spending, wealth and debt

Household income

Breakdowns of how much households have coming in and what effect taxes and benefits have on these are measured by the Office for National Statistics (ONS). However, income isn’t as simple as one payment coming in; it’s more like a series of redistributions.

People begin with income from work, private pensions or investments, called ‘original income’. They may get cash benefits on top of this, making up their total ‘gross income’. However, they then have to pay taxes on their income, after which they’re left with ‘disposable income’. After this, they buy things and have to pay indirect taxes on these, leaving them with their ‘post-tax income’. Finally, people get benefits from public services, known as ‘benefits in kind’, which leaves them with ‘final income’.

Figures for all these stages are available via the ONS’s ‘The Effects of Taxes and Benefits on Household Income’.

The amount of spare income (disposable income) people have to spend, as well as how much people save as a portion of their income, is put out as part of the government’s Quarterly National Accounts. Historical figures for disposable income and savings are also published by the ONS.

Household spending

Figures for the overall amounts households spend, broken down into a few basic areas, are published in the ONS’s consumer trends series. Historical figures back to 1997 are provided in key economic time series data.

Comparisons of how much people spend and what they spend their money on, broken down by all sorts of attributes such as age, region and whether people are in work, are compiled by the Living Costs and Food Survey.

Although it’s part of the same survey, more detailed information about what families spend on different types of food is published as family food statistics by the Department for Environment, Food and Rural Affairs.

Household wealth and debt

While income represents what’s coming in, wealth values what someone already owns or has a stake in. This includes private pension pots, property and mortgages, possessions and vehicles. The Wealth and Assets Survey tells us more about who’s wealthy, which region they live in and what makes up their assets.

HM Revenue and Customs also provides more detailed information on personal wealth.

The Wealth and Assets Survey has information on the total amount of household debt in the UK.

Personal insolvency and bankruptcy

People who get into financial difficulty can be ‘insolvent’, broadly meaning they are unable to pay their debts in one way or another. After that there are a number of options. Bankruptcy happens when individuals are ordered to have their own assets distributed amongst their creditors. Debt Relief Orders allow people to be freed of their debt if they meet certain criteria, so they tend to be available for people who don’t have much income or don’t own their own home. People can also enter into an ‘Individual Voluntary Arrangement’ with their creditors through the court and write off some or all of the debt.

Insolvency statistics are published every three months by the Department for Business, Innovation and Skills (BIS).