This is a rise of just 21% since 1997 against a gross household income rise of 54%, and shows the extent of Britons' rapidly declining spending power in the last 12 months since the start of the credit crunch.
The 15% shock fall in disposable income over the last 12 months is unprecedented, according to uSwitch. Disposable income now represents just 28% of gross household income, compared to 35% in 2007. The rapid decline is attributed to essential living costs soaring at their fastest rate since records began, while rises in tax and social contributions have eaten into net income, which, as a proportion of gross income, has fallen 0.5% in the last year alone.
This July has seen unemployment surging at its fastest rate in 16 years and wage growth the weakest in five years. uSwitch.com figures reveal that a 9 million (35%) of us are not getting a pay rise this year. Of those who are, 77% expect 4.5% or below and 74% expect 4% or below. With rises of just 2.8%, 2.45% and 2.2% respectively, manufacturing workers, teachers and prison officers will have even less in their pockets to cope with soaring bills.
That the cost of living is spiralling upwards is particularly bad news for the UK's poorest households. The number of people earning below the 40% national average household income threshold is at its highest since records began in 1979. There are now 5.6 million living below the 40% threshold, compared to 1.3 million at the end of the '70s.
uSwitch.com's study also reveals huge disparities in disposable income between UK towns and cities. While some parts of the country spend just 30% of their net income on household bills, others see over twice as much disappearing on their essentials. Some consumers are seeing up to 80% of net income being eaten up by household bills.
The study also shows that this year the average UK house price has dropped for the first time since 1992 to £174,514 compared to £181,810 in 2007. However, the time it takes to sell a house - 10 weeks - is the longest since 2001. What's more, house sale prices as a percentage of the asking price is now 91.6% - an all-time low since housing market studies began in 2001.
Yet despite tumbling house prices, average monthly mortgage repayments have risen from £965 in 2007 to £1,025 in 2008 - a 6.2% increase - and the interest rate shows no sign of coming down.
