Cost of living research: Squeeze on disposable income as monthly financial commitments get more expensive

New cost of living research commissioned by elephant suggests British households are feeling the squeeze on disposable monthly income, as they react soaring energy prices and the rising cost of living.
January 27, 2023

Look­ing at the break­down of where the month­ly pay check goes, for the major­i­ty of UK house­holds much of the salary was already com­mit­ted on pay day. On aver­age, mort­gages and rent account­ed for around 20% of the month­ly pay check, with 9% going on loan com­mit­ments and 6% to ser­vice cred­it cards.

Fol­low­ing the rise in prices in recent months, food account­ed for 20% of the month­ly pay check, whilst heat­ing and util­i­ties stood at 18%.

Set against these com­mit­ments, on aver­age only 7% of the aver­age month­ly pay check went into sav­ings or invest­ments and the aver­age work­er had around 12% of their take-home pay left to allo­cate for dis­pos­able income.

The research, which is part of a new insight series from ele­phant, sug­gests many peo­ple are not sav­ing enough and the rel­a­tive pro­por­tion of income free as dis­pos­able income is a use­ful way to assess how much finan­cial band­width fam­i­lies have to cope with ris­ing liv­ing costs. The data also sug­gest­ed that, by age group, those typ­i­cal­ly with young fam­i­lies have the least pro­por­tion of mon­ey avail­able as dis­pos­able income.

ele­phant will be run­ning insight ses­sions on the full research through Feb­ru­ary and March. Do drop us a line if you would like a free session.