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.
Baroness Michelle Mone has broadened her attack on her political critics, accusing Conservative leader Kemi Badenoch of using “inflammatory” and “reckless” language that could prejudice a police investigation into her role in the awarding of PPE contracts.
A day after she wrote to Sir Keir Starmer, accusing the government of pursuing a vendetta against her, the former Conservative peer responded to comments by Ms Badenoch following a High Court ruling that a company linked to Baroness Mone’s husband must repay £122m received for surgical gowns.
The court found that PPE Medpro, founded by her husband Doug Barrowman, was in breach of contract with the Department of Health and gave it two weeks to repay the sum.
While not a director of the company, Baroness Mone used her political contacts to introduce PPE Medpro to the government’s “VIP fast-lane” at the start of the pandemic, and a family trust of which her children are beneficiaries received £29m of the profits.
A separate criminal investigation by the National Crime Agency (NCA) is ongoing, and assets linked to the couple worth £75m have been frozen while it continues.
In a series of radio interviews, Ms Badenoch criticised Baroness Mone, accusing her of bringing shame on the Conservative Party and calling for her to step down from the House of Lords.
“Where people do wrong, they should be punished,” she said. “They should face the full force of the law and this is something that I very strongly believe in,” she said.
“And as the prosecution against her continues, they should throw the book at her for every single bit of wrongdoing that has taken place.”
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Baroness Mone ‘should resign’
In a letter from her private office, Baroness Mone accuses the Tory leader of being ignorant of the facts and calls out a series of other Conservative politicians who introduced companies to the VIP lane.
“I was shocked to the core to read about your inflammatory language on BBC Radio yesterday calling for me to resign from the House of Lords,” she writes.
“You are commenting on a live criminal investigation that could prejudice the outcome of any trial, and in so doing, you are reportable to the attorney general for breach of and contempt of court. Does no one ever tell you these things before you and your colleagues make reckless statements in the public domain?”
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Baroness Mone goes on to say the NCA investigation has “nothing to do with PPE Medpro and the contracts”.
“The case theory of the NCA investigation is that I somehow misled the Conservative government about my alleged concealed involvement and ended up pocketing a lot of money,” she writes. “Well I’m sorry to disappoint you, but it isn’t true.”
She also says the Conservative government knew of her involvement and names former health secretary Matt Hancock, Lord Agnew, Lord Feldman and Lord Chadlington as being among 51 “mostly Conservative peers and MPs” who introduced providers to the VIP lane.
“So Kemi, my role was exactly the same as all other Conservative MPs and peers who were trying to help provide PPE… if I have done wrong, then so have all the others in the VIP lane. In which case, you should be calling out for them to resign as well. That’s if you manage to work out what it is they are supposed to have done wrong.”
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The High Court says a company linked to Mone breached a government contract of nearly £122m
She concludes by saying she has no wish to rejoin the Lords as a Conservative peer when her leave of absence ends, “that’s assuming there still is a Conservative Party before the next General Election”.
The letter comes as an online petition calling for Baroness Mone to step down from the Lords, launched by the Covid-19 Bereaved Families for Justice, attracted 60,000 signatures in 24 hours.
The Conservative Party has been approached for comment.
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