UK households see first quarter net income jump
UK households saw their net disposable cash income jump by 5.4% year-on-year in the first quarter of 2018 – the fastest increase since 2015 – as they paid less tax and employment and other income remained strong, according to ConsumerCast’s 2018 Q2 UK Consumer Briefing. Real, inflation-adjusted income also hit its strongest growth rate since the start of 2016, with an increase of 2.4% year-on-year.
This improvement is expected to slow in Q2 and for the rest of 2018 as tax payments start to rise once more and higher interest payments start to take effect.
However, the news is not so good for consumer spending. Households have been running down the amount of money added to their bank balances since 2016 Q3 as well as borrowing more. This has left them as heavy net borrowers throughout most of 2017. They have only just begun to rectify this financial run-down and are likely to take until late 2018 or early 2019 to rebuild their bank balances and start spending again.
The outlook for different age groups remains very uneven, with under-30s suffering real terms declines or stagnation in net income, while 50-64s and 65+ households are both set to outperform.
For further information, contact ConsumerCast founder/director Robert Carruthers: