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Brits struggle with little disposable income

The average British adult has just £276 of disposable income each month, less than £10 a day, a study by Salary Finance has found.


A poll of 2,000 adults has found that after paying out for their rent and mortgage, utility bills, food and other living expenses, just a small amount of ‘spare’ cash is left over for the lighter things in life.


While 49% of people set a budget to try and make their money last the month, 22 per cent usually fail to stay within their limits, going an average of £122.47 over budget each month. Of those surveyed 45% even claim to often have months with absolutely no disposable income whatsoever.


Researchers found that despite having an average monthly income of £1,812, the average Brit is left with just £276 for luxuries after covering their essential bills.


The highlights of the survey are:


  • Rent or mortgage takes up the biggest chunk of cash at £270 per month, while food and drink accounts for £223 per person each month.
  • Utility bills take another £188 a month, while TV, internet and phone costs add another £61 to the total monthly expenditure.
  • Other direct debits (£55), credit card (£84) and loan repayments and even the cost of traveling to work (£56) also adds up over the course of a month.
  • As a result, the average adult estimates they spend just £201 a month on items they would describe as luxuries.
  • Eating out accounts for £61.30 a month, with another £71.99 spent on going out with friends and socialising.
    Almost £40 a month is also spent on sports and hobbies.

For parents, they have even less spare cash with the average mum and dad saying their monthly disposable income dropped by £231 after having children.


They also face extra monthly bills, including childcare costs of £45.68 and fees for school activities amounting to £50.70 a month.


How this affects employees

For many, the main reason for going to work is to earn a living. But while we want to be able to pay the bills, it would be nice to have at least a little bit left over to spend on some of the lighter things in life. Unfortunately, it seems for many, there is just not enough money to go around and they are left with very little spare cash after paying out for all the essentials. This can lead to feelings of stress and even depression concerning financial wellbeing, which can impact people both personally and professionally.


What this means for employers

Our previous research found that money worries affect 40% of UK employees, and an individual’s financial wellbeing is not as linked to salary levels as you may expect. In fact, financial wellbeing is related more to saving, spending and borrowing habits, meaning those that do manage to save some money each month feel happier and are less stressed by their financial situation.


We know a lack of disposable income, amongst other things (such as time), can make saving difficult. That is why salary-linked saving can be beneficial to many, as money is directed straight into a savings account meaning it is not ‘missed’ and there is no time spent popping this money into a savings account.


This helps people feel happier knowing that they have this money for any emergencies – or treat themselves on a rainy day.

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