10 October 2017
There has been a lot of talk in recent months about the standard of living so it is timely that we look at the statistics relating to Gross Disposable Household Income (GDHI) published by the Office of National Statistics (ONS), which includes figures for our region. Here is a summary of our findings.
As a starting point, it is helpful to define GDHI. The ONS goes into a great deal of detail but essentially it is the amount of annual income a household has to spend, taking into account all sources of income including benefits, after paying taxes and mortgage or rent.
The most useful statistics are GDHI per head, which is the GDHI divided by the population of each region. ONS produces figures at different regional levels – splitting the UK between the respective countries, regions, counties, and then (finally) the 173 distinct geographical units covering the whole of the UK, one of which is Sheffield. The latest available figures are for 2015 and are still provisional.
For the whole of the UK, the average GDHI per head in 2015 was £19,106, a rise of 2.91% over the previous year. Interestingly, statistics are available as far back as 1997 when the equivalent figure was £11,054. So the increase over 18 years has been 72.8% or an annualised rate of 3.09%. During that time the Consumer Prices Index has increased by 62.8% and the Retail Price Index by 42.2%. Arguably the best yardstick is the RPI as this excludes housing costs. It seems therefore that there has been a real, though admittedly small rise in the average standard of living over the past 18 years covered by these statistics.
Our region has fared quite well in this most recent period from 2014 to 2015, showing a rise in disposable household income of 2.77% to £15,228. This is below the national average, but only just so. Impressively, Sheffield’s growth was greater than Manchester’s (2.06%) and York’s (2.49%) and only slightly behind Leeds (2.97%).
Just for the record, the highest rate of growth was 6.1% in the London Borough of Enfield, bringing its GDHI per head to £20,514. Number one in value of GDHI was Kensington & Chelsea and Hammersmith & Fulham at £52,298, although their position should come as little surprise.
Sheffield’s performance is good news, but comes against a longer term decline. Sheffield’s position in the league table of 173 comparable districts in 1997 was 125th. By 2015 it had fallen to 152nd. Our city was hit hard in the recession, suffering more than many others, and the figures reflect this.
It is also important to bear in mind when interpreting these statistics is that they relate to income available after deduction of housing costs. So where house prices are high, or rising quickly, this tends to reduce the disposable income. Sheffield is an attractive place to live and do business in. Residential property rents and house prices have increased, slowing the growth in disposable incomes. This is one of the main reasons that Sheffield’s disposable income is continuing to grow at a slower rate than that of other parts of the UK, despite the economy strengthening during the period.
However, these figures are welcome good news for Sheffield and perhaps we can look forward to a continuation of the trend, particularly as new high-profile international engineering companies get established in this region.
Please feel free to contact me at email@example.com if you would like to discuss any aspects of this blog.