Finances feeling tight? New figures on disposable income help explain why
Monthly disposable income fell by £40 per person between Boris Johnson’s election victory in December 2019 and Rishi Sunak’s defeat in July 2024.
It is the first time in recorded British history that disposable income has been lower at the end of a parliamentary term than it was at the start, Sky News Data x Forensics analysis reveals.
Disposable income is the money people have left over after paying taxes and receiving benefits (including pensions). Essential expenses like rent or mortgage payments, council tax, food and energy bills all need to be paid from disposable income.
Previously published figures showed a slight improvement between December 2019 and June 2024, but those were updated by the Office for National Statistics on Tuesday.
There has been an uplift in the last year, although we’re poorer now than we were at the start of the year, and today we only have £1 more on average to spend or save each month than we did at the end of 2019.
That represents “an unmitigated disaster for living standards”, according to Lalitha Try, economist at independent living standards thinktank the Resolution Foundation.
Have things gotten better under Labour?
Disposable income has increased by £41 per person per month since Labour took office in July 2024. However, that masks a significant deterioration in recent months: it is lower now than it was at the start of 2025.
In the first six months of Labour’s tenure, disposable income rose by £55, a larger increase than under any other government in the same period. In part, this was down to the pay rises for public sector workers that had been agreed under the previous Conservative administration.
But the rise also represents a continuation of the trajectory from the final six months of the outgoing government. Between December 2023 and June 2024, monthly disposable income rose by £46.
That trajectory reversed in the first part of this year, and the average person now has £14 less to spend or save each month than they did at the start of 2025.
Jeremy Hunt, Conservative chancellor from October 2022 until the July 2024 election defeat, told Sky News: “The big picture is that it was the pandemic rather than actions of a government that caused it [the fall in disposable income].
“I clawed some back through (I know I would say this) hard work, and Labour tried to buy an instant boost through massive pay rises. The curious thing is why they have not fed through to the numbers.”
The £40 drop between Mr Johnson’s electoral victory in 2019 and Mr Sunak’s loss in 2024 is roughly the same as the average person spends on food and drink per week.
By comparison, since 1955, when the data dates back to, living standards have improved by an average of £115 per month between parliamentary terms.
Vital services, things like energy, food and housing, that all need to be paid for out of disposable income, have all increased in price at a faster rate than overall inflation since 2019 as well.
This means that the impact on savings and discretionary spending is likely to be more severe for most people, and especially so for lower earners who spend a larger proportion of their money on essentials.
Responding to our analysis, the Resolution Foundation’s Lalitha Try said: “Average household incomes fell marginally during the last parliament – an unmitigated disaster for living standards, as families were hit first by the pandemic and then the highest inflation in a generation.
“We desperately need a catch-up boost to household incomes in the second half of the 2020s, and to achieve that we’ll need a return to wider economic growth.”
Analysis by the Joseph Rowntree Foundation, which also takes into account housing costs, says that disposable income is projected to be £45 a month lower by September 2029 than it was when Labour took office.
We approached both Labour and the Conservative Party for comment but both failed to respond.
Read more:
Is PM making progress towards his key policies?
How are Labour performing in other areas?
Labour have made “improving living standards in all parts of the UK” one of their main “missions” to achieve during this parliament.
Sam Ray-Chaudhuri, research economist at the Institute for Fiscal Studies, told Sky News: “Labour’s mission to see an increase in living standards over the parliament remains a very unambitious one, given that (now) almost every parliament has seen a growth in disposable income.
“Doing so will represent an improvement compared with the last parliament, but it doesn’t change the fact that we are in a period of real lack of growth over the last few years.”
As well as the living standards pledge, the Sky News Data x Forensics team has been tracking some of the other key promises made by Sir Keir and his party, before and after they got into power, including both economic targets and policy goals.
Use our tracker to see how things like tax, inflation and economic growth has changed since Labour were elected.
The policy areas we have been tracking include immigration, healthcare, house-building, energy and crime. You can see Labour’s performance on each of those here.
Click here to read more information about why we picked these targets and how we’re measuring them.
The Data and Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open source information. Through multimedia storytelling we aim to better explain the world while also showing how our journalism is done.
UK car production fell by more than a quarter (27.1%) last month as a cyberattack at Jaguar Land Rover halted manufacturing at the plant, industry figures show.
The total number of vehicles coming off assembly lines – including cars and vans – fell an even sharper 35.9%, according to September data from the Society of Motor Manufacturers and Traders (SMMT).
“Largely responsible” for the drop was the five-week pause in production at Jaguar Land Rover (JLR) due to a malicious cyber attack, as other car makers reported growth.
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JLR’s assembly lines in the West Midlands and Halewood on Merseyside were paused from late August to early October as a result.
During this time, not a single vehicle was made. Production has since restarted, but the attack is believed to have been the “most financially damaging” in UK history at an estimated cost of £1.9bn, according to the security body the Cyber Monitoring Centre.
It was the lowest number of cars made in any September in the UK since 1952, including during the COVID-19 lockdown.
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Are we in a cyber attack ‘epidemic’?
Despite the restart, the sector remains “under immense pressure”, the SMMT’s chief executive Mike Hawes said.
The phased restart of operations led to a small boost in manufacturing output this month, according to a closely watched survey.
Of the cars that were made, nearly half (47.8%) were battery electric, plug-in hybrid or hybrid.
The vast majority, 76% of the total vehicles output, were made for export.
The top destinations are the European Union, US, Turkey, Japan and South Korea.
JLR was just the latest business to be the subject of a cyberattack.
Harrods, the Co-Op, and Marks and Spencer, are among the companies that have struggled in the past year with such attacks.
Championship club Sheffield Wednesday have filed for administration, according to a court filing, which will result in the already struggling side being hit with a 12-point deduction.
The South Yorkshire club currently sit bottom of the Championship, the second tier of English football, with just six points from 11 games.
Known as The Owls, Wednesday are one of the oldest surviving clubs in world football, with more than 150 years of history.
Court records confirm the club have filed for administration. A notice was filed at a specialist court at 10.01am.
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Sky’s Rob Harris reports on the news that Sheffield Wednesday have filed for administration
What has happened?
The Owls, who host Oxford United on Saturday, have been in turmoil for a long time.
On 3 June, owner Dejphon Chansiri, a Thai canned fish magnate who took over the club in 2015, was charged with breaching EFL regulations regarding payment obligations.
Sheffield Wednesday fans protest the ownership at a game away to Leeds United in January. Pic: Reuters
Weeks later, Mr Chansiri said he was willing to sell the club in a statement on their official website.
Sheffield Wednesday’s troubles have sparked furious protests from fans. Pic: PA
Their crisis deepened just days later when another embargo was imposed on the club relating to payments owed to HMRC, before players and staff were not paid on time on 30 June.
In the months that followed, forwards Josh Windass and Michael Smith left the club by mutual consent. Manager Danny Rohl, now at Rangers, also left by mutual consent.
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Frustrated Sheffield Wednesday supporters have targeted their embattled club’s owner in a highly-visible protest during their opening match of the season.
The Owls were forced to close the 9,255-capacity North Stand at Hillsborough after a Prohibition Notice was issued by Sheffield City Council.
‘Current uncertainty’
On 6 August, the EFL released a statement, saying: “We are clear that the current owner needs either to fund the club to meet its obligations or make good on his commitment to sell to a well-funded party, for fair market value – ending the current uncertainty and impasse.”
On 13 August, the Prohibition Notice was lifted, but a month later, news emerged of a winding-up petition over £1m owed to HMRC.
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Last season, Wednesday finished 12th. They had already been placed under registration embargoes in the last two seasons after being hit by a six-point deduction during the 2020/21 campaign, for breaching profit and sustainability rules.
With a 12-point deduction, the Owls would be 15 points away from safety in the Championship.
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