Predicting the UK’s biggest disposable incomes by 2030

• Kensington and Chelsea has the highest gross disposable household income (GDHI) in England
• Northern cities have seen the biggest increase in disposable income over the last 10 years
• The north is predicted to see the biggest increase in disposable income over the next 10 years, too

We decided to analyse the current status of the highest disposable income levels across the UK, and compare them to 10 years ago, to see where the biggest increases are, and then predict what these will look like by 2032.

The home of the rich and famous, it comes as no surprise that the London borough of Kensington and Chelsea has come in top place. By 2030, the average household living here is expected to have a disposable income of £76,643 – that’s a huge 54% higher than the next area to feature on this list, Westminster.

By Diego Delso, CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=35480036

According to Rightmove, the average cost of a property in Kensington and Chelsea is £2.3 million, and £1.875 million in Westminster, and with 13 streets in Kensington having houses with an average value of more than £10 million, the affluence here means disposable income is going to be higher than the rest of the UK.

London dominates the list, with no areas outside the south making it into the top 10. Camden, a northern London borough, comes in third place, with a predicted disposable income of £39,395 by 2030; followed by Hammersmith and Fulham, which shares a border with Kensington.

Richmond upon Thames – home to the beautiful Richmond Park, and a mere 20-minute train ride from Waterloo – rounds off the top 5, with a predicted disposable income of £37,824 by 2030.

The only areas outside of London to make it onto the list are Elmbridge and Waverley, which are both located in Surrey, and are predicted to have a disposable income of £35,411 and £29,425 respectively by 2030 (an increase from 6.3% and 6% in 2022).

St. Albans in Hertfordshire also makes it into 8^th place on the list. With gross disposable household income sitting at £28,909 in 2022, it’s predicted to increase by 7.5% by 2030, then sitting at £30,474.

The table below shows which UK areas are predicted to have the highest GDHI by 2030:

However, if we look at the biggest percentage increases in GDHI over the last 10 years, then nowhere in London makes it into the top 10. In fact, only areas in the north are featured.

30-40 years ago, there was a clear divide in terms of wealth between the north and south. However, with more young people moving north due to the growing job opportunities and cheaper house prices, the wealth has been more evenly spread around.

In top place, with a 28.8% increase in GDHI compared to 2012, is Barrow-in-Furness. Located in Cumbria, its picturesque placement by the Lake District is a great place to retire, with households now having a disposable income of £19,046.

Barrow In Furness

Manchester comes in second place, with a 28.3% increase. With the BBC and ITV recently moving to MediaCity, Manchester has since seen a huge influx of Londoners moving up to take advantage of the jobs and cheaper house prices (average prices currently stand at £283,563), with a gross disposable income of £15,389 in 2022.

Several areas in Cumbria make it onto the list, with Carlisle in third place, Eden in fifth, and Copeland in eighth, seeing a 28%, 27%, and 26.1% increase in GHDI over the last 10 years respectively.

The northeast – which was once seen as the poorest area of England – has also made it into the top 10, with Newcastle a hub of job opportunities, and Northumberland another attractive retirement option.

Darlington and Tameside are in sixth and ninth place, with a disposable income of £18,205 and £17,357; and Northumberland has also made its way into the top 10. Full of charming towns and beautiful beaches, it’s a great place to enjoy a slower pace of life, with retirees moving there helping to increase disposable income by 25.4% over the last 10 years.

The table below shows the UK areas where GDHI has increased (as a percentage) the most over the last 10 years (2012 – 2022):

Now that we know which areas have seen the biggest increase in GDHI over the last 10 years, we then looked to see which areas are predicted to see the biggest growth between 2022-32, and once again, the north dominates the list.

Barrow-in-Furness comes top again, and is expected to see a 22.9% increase by 2032, taking their predicted disposable income to £23,415.

Carlisle isn’t far behind, at 21.2%, with Middlesbrough, Copeland, and Manchester all making it into our top five.

New additions to this list include Redcar and Cleveland in North Yorkshire, Hartlepool in County Durham, and South Tyneside, which is just south of Newcastle, in Tyne and Wear.

The table below shows the UK areas where GDHI is predicted to increase (as a percentage) the most over the next 10 years (2022 – 2032):

Away from the households with the highest disposable incomes in the UK, those fortunate enough to have any money left after essentials have interesting choices to make. The latest figures from the ONS can be used to look at changes in discretionary spend. 

According to the Office of National Statistics, discretionary spend is spend on 

“Goods or services which could be considered "optional" purchases, such as takeaway meals, alcohol and holidays. Spending on these goods and services may be more responsive to changes in household wealth or relative prices”

Where will UK consumers make cuts in these optional purchases? Will we see a reduction in spend on holidays, leisure or takeaway food? Will people drink or gamble less, reducing spending with pubs,  bookmakers and casinos?

OLBG has taken data from the ONS Family Spending Workbook which looks at household spend weekly by running an annual survey of over 27,000 households. We have then converted this to monthly spend per adult using the number of adults in the total sample each year. 

The table below shows us spend per adult per month over the past three years, with the latest results published in July 2022 for the financial year ending April 2021. These figures show some interesting changes during periods of lockdown from Covid 19 (mostly impacted in the 20/21 figures). We will update these figures in July 2023 when the next set of data is likely to show interesting changes due to the squeeze on budgets available for these discretionary spends during the financial year 2021/22.

Table Showing Per Adult Monthly Spend on Selected Discretionary Goods and Services

For the UK's biggest disposable incomes and trends, all data was analysed from 1997-2021 - ONS. A linear forecast function was performed using historical data from 1997 to now, to predict future values.

For the UK's discretionary spend trends, data was taken from the ONS Family Spending workbook and converted to monthly spend per adult.