PwC: 46% of UK households miss out on economic growth benefits
A PwC report reveals 12.5 million UK households see no living standard boost from growth, highlighting a persistent North-South spending power divide.
Stock photo for illustration only, not from the actual event
- 46% of UK households, or 12.5 million homes, fail to see living standards rise with economic growth.
- The north of England, midlands, and Wales record spending power below the national average.
- Yorkshire and the Humber suffer the worst drop, with spending power down by £1,917 annually.
- The government pushes for increased devolution and fiscal powers to local mayors to tackle regional gaps.
A new research report from consultancy firm PwC has revealed that nearly half of the population in the United Kingdom is failing to experience the tangible benefits of broader economic expansion. The findings show that the equivalent of 12.5 million households, or 46% of the country, live in areas where increased economic growth has not translated into improved living standards.
The study highlights a distinct regional divide, noting that every region across the north of England, the midlands, and Wales records a spending power below the national average. Meanwhile, London and the South East remain comfortably above the threshold, underscoring persistent economic inequality across the nation.
According to the concrete figures in the report, households in the north east of England face a spending power 6.6% below the national average, equating to £1,542 less per year. The north west trails by £1,493, while Yorkshire and the Humber rank the worst with a drop of £1,917 annually.
Stock photo for illustration only, not from the actual event
Conversely, households in the South East enjoy a spending power 9% above the national average, worth an extra £2,154 a year, closely followed by London. PwC calculates these figures by evaluating income after taxes and housing costs, while accounting for household size and composition to determine available funds for other expenses.
"Success should be judged not simply by whether local economies grow, but by whether that growth leads to greater prosperity, wider opportunity and better lives for the people and communities within them."
PwC Report
The report also points out stark disparities within affluent regions. Richmond recorded the highest average annual disposable income in London at £35,448, nearly double the £18,384 registered in neighboring Hammersmith and Fulham. Although high housing costs weigh heavily on southern households, higher overall incomes help cushion the impact.
Household spending power serves as a more reliable indicator of public well-being than gross domestic product (GDP) alone. While headline GDP figures may show macroeconomic expansion, the actual distribution of wealth determines whether everyday citizens feel financially secure. Addressing the deep-seated structural divide between the capital and the regions remains a critical test for the government's economic agenda.
A government spokesperson stated that the establishment of No10 North forms part of its core growth mission to reshape regional administration. The administration has already introduced unprecedented financial powers for English mayors, allowing them to retain a share of income tax revenues to stimulate local economies and enhance public services.
Source: BBC Business
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