Aberdeen see fastest rise in disposable income over last five years

Publications that covered this article include The Financial Times, The Daily Telegraph and The Independent, 10 October 2011.

  • Aberdeen beats London to first place

Aberdeen and other major Scottish cities have seen the fastest rise in gross disposable incomes over the last five years, reveals our research.

The research, which looks at the Top 50 UK towns and cities, shows that three of the top five locations with the highest increase in gross disposable household income are in Scotland. (See table below for the UK’s Top 50 towns and cities – based on National Statistics data).

Our research explains that Aberdeen beat London to first place, becoming the city with the highest increase in ‘Gross Disposable Household Income’ (GDHI) over the last five years.[1]

Disposable household income jumped 24.7% in Aberdeen from £13,669 in 2004 to £17,039 as of Dec 31 2009 (latest stats available). London came second with a 22% rise from £16,096 in 2004 to £19,658 in 2009.

Over the same period, Glasgow (4th) and Dundee (5th) saw their GDHI increase by 20.6% to £13,571 and 14,316 respectively in 2009.

It was found that household incomes in Aberdeen were boosted by a booming oil industry.

As the oil capital of Europe, Aberdeen has enjoyed the benefits of rising oil prices, which has seen increased investment in the North Sea. Aberdeen is also the headquarters of some of the world’s leading oil & gas service companies – who benefit from increased exploration work across the world rather than just in the North Sea.

Scotland’s performance was also helped by the fact that it has suffered a much smaller fall in householder employment rates in this period than the rest of the UK.

Although pay increases over the last five years, across the UK, have been relatively modest disposable income has been boosted by a fall in the mortgage payments as the Bank of England of slashed the base rate to 0.5%.

Marc Waterman, partner at our London office, comments: “London has been seen as streets ahead of the all other UK towns and cities for growth in disposable household income, but these figures show that the gap is closing.”

“Although London still has the greatest disposable income in the UK, Aberdeen is catching up fast.”

Marc explains: “As the center of the UK’s oil & gas industry, Aberdeen benefitted from persistently high oil prices. Despite the recent North Sea tax increases, there has been continued investment in North Sea oil & gas production.”

“If oil prices remain at their current rate of over $90 a barrel, this momentum is likely to continue.”

“Although disposable incomes in Dundee and Glasgow have grown from a low base, the growth has been very rapid, aided by their low housing costs and the fact that they avoided the worst of a spike in unemployment.”

“However, with more public sector budget cuts on the way growth in disposable income may moderate or reverse for some towns that are heavily dependent on public sector employment.”

Top 50 towns and cities by the highest increase in gross disposable household income (GDHI) over the last five years

 

Rank

Urban sub-area

2009

2004

% change

1

Aberdeen City and Aberdeenshire

17039

13669

24.65%

2

London

19658

16096

22.13%

3

Stoke-on-Trent

12097

9987

21.13%

4

Glasgow City

13571

11250

20.63%

5

Angus and Dundee City

14316

11871

20.60%

6

Monmouthshire and Newport

14887

12360

20.44%

7

Belfast

14383

12057

19.29%

8

Sunderland

12196

10236

19.15%

9

Bournemouth and Poole

16239

13756

18.05%

10

Preston

13697

11627

17.80%

11

Maidstone

15995

13621

17.43%

12

Newcastle upon Tyne

13138

11189

17.42%

13

Liverpool

12456

10617

17.32%

14

Blackpool

12199

10427

16.99%

15

Telford and Wrekin

13151

11252

16.88%

16

Swansea

13447

11522

16.71%

17

Northamptonshire

15247

13069

16.67%

18

Edinburgh, City of

17160

14767

16.21%

19

Peterborough

14235

12278

15.94%

20

Ipswich

14913

12868

15.89%

21

Walsall and Wolverhampton

12041

10396

15.82%

22

Norwich

13779

11902

15.77%

23

Brighton and Hove

16320

14140

15.42%

24

Cardiff and Vale of Glamorgan

14065

12194

15.34%

25

Dudley and Sandwell

12106

10505

15.24%

26

West Bromwich

12106

10505

15.24%

Average for Top 50 Cities

693321

601665

15.23%

27

Reading

17881

15520

15.21%

28

Southampton

12231

10624

15.13%

29

Oxfordshire

17493

15200

15.09%

30

Plymouth

12769

11097

15.07%

31

Manchester

13290

11585

14.72%

32

Middlesbrough

14759

12901

14.40%

33

Milton Keynes

15591

13637

14.33%

34

Coventry

12260

10763

13.91%

35

Birmingham

12010

10589

13.42%

36

York

14044

12469

12.63%

37

Basildon

16359

14539

12.52%

38

Huddersfield

12968

11595

11.84%

39

Southend-on-Sea

15446

13820

11.77%

40

Derby

12399

11129

11.41%

41

Bradford

12104

10871

11.34%

42

Swindon

15351

13820

11.08%

43

Leicester

11163

10070

10.85%

44

Kingston upon Hull, City of

10783

9754

10.55%

45

Bristol, City of

13582

12286

10.55%

46

Portsmouth

11693

10605

10.26%

47

Nottingham

10602

9633

10.06%

48

Leeds

13179

12030

9.55%

49

Luton

12332

11327

8.87%

50

Sheffield

12591

11640

8.17%


[1] ‘Gross disposable household income’ is the amount of money that individuals have available to spend after expenditure associated with income, like taxes, property costs, pension payments and social contributions. Based on National Statistics data