How has disposable income changed since 2010?

Ahead of the Budget we saw a couple of different claims about how household incomes have fared since 2010.

On Monday, economic secretary to the Treasury Bim Afolami MP claimed during an interview on LBC that “real household incomes” had increased by 12% since 2010, while it was reported in the Mirror that the last Labour government had overseen much higher growth in disposable income than seen since the Conservatives entered government in 2010.

When looking at real household disposable income, which takes into account taxes and benefits, and is also adjusted for inflation, it is true that incomes have increased in real terms under the Conservative (or Conservative-led) government, albeit not by quite as much as Mr Afolami claimed. But it’s also true that real income growth has been weaker than levels seen under the last Labour government.

We often see Ministers and the Opposition claiming households are a specific amount ‘better’ or ‘worse’ off as a result of government policies, and have fact checked several such figures over recent years.

Disposable income has increased since 2010…

Mr Afolami claimed that “we’ve got real household incomes up 12% since 2010”.

Full Fact has confirmed with the Treasury that Mr Afolami misspoke, and that the 12% figure actually refers to the increase in GDP per capita between 2010 and 2022.

The Treasury said that real household disposable income per capita has increased by 7.8% over the same period. This appears to be based on real households net adjusted disposable income (the average amount of money that a household earns each year, after taxes), which has increased by 7.89% between 2010 and 2022. 

It’s worth noting that by a slightly different measure Mr Afolami was not far off—according to the ONS median real household equivalised disposable income (which considers the number of people living in the household and their ages) has increased by approximately 11% between 2010/11 and 2021/22.

… but at a slower rate than over the previous 13 years

Labour has made a different claim about disposable income, stating that it has increased by less under the Conservatives than it did under the last Labour government.

The Daily Mirror reported: “Between 1997 and 2010, the average disposable income went up from £1,219 per month to £1,568 in real terms, which was a 28.6% increase. In the 13 years since then, it grew by just 11% to £1,746.”

These figures appear to be based on quarterly data for real household disposable income per capita, which do show a substantially higher rate of growth during the 13 years of the last Labour government compared to the past 13 years. We’ve asked Labour about these figures and will update this article if we receive a response.

Image courtesy of Christopher Bill