Scots disposable income on the rise

Scots disposable income is on the rise
Scots disposable income is on the rise

Scottish families had an extra £12 in their pockets in September, compared to last year.

The average household across Scotland enjoyed a weekly discretionary income reaching £190 a week.

The rise comes despite an overall slump in growth in Scotland of 3.1 per cent and 0.6 per cent rise in unemployment since the previous quarter.

However, Scotland still remains within the top five regions with the highest spending power, £15 a week better off than the next highest region, the South West.

Contributing factors helping the rise include a 2.3 per cent drop in the price of food and drink over the past year means that those to hibernating at home, can stock their cupboards for those big nights in front of the TV, particularly as the UK’s inflation rate continues to hit negative numbers (-0.1 per cent), with September marking the eight consecutive month of near zero inflation.

As icy lows loom for the coming months, there is an extra comfort blanket in the form of falling gas prices for those keeping an eye on the pennies, with a welcome pre-winter drop of 2.1 per cent in September meaning consumers can feel more confident when heating up their homes.

The good news doesn’t stop there, however. For those Scots looking to visit families over Halloween and Bonfire night, falling fuel prices will help to make the journey more enjoyable, with petrol prices dropping 3.7p per litre in September.

Meanwhile, families choosing to add to their summer styles for a last-ditch summer break, made the most of extended sales which led to bigger bargains, and with Bonfire Night nearing, sparks are also expected to fly amongst shoppers looking to stock up on clothing essentials to help them brave the colder months.

Taking a national view, it’s a positive picture across the board, with all regions across the UK seeing double-digit increase in household discretionary income over the last year, ranging from a £12 increase in Scotland, to a £24 increase seen in the Capital.

Income growth in Scotland has also sharply fallen by one per cent since the last quarter due to pay cuts in the oil and gas industry and relatively weak growth in the public sector.

The knock on effects of these pay cuts now mean that as a whole recovery in Scotland now lags behind the rest of the UK.

Although Scotland has felt a slowdown in gross income growth, essential item inflation remains negative in the region, a driving force behind the easing pressure on household finances.

Chief Customer Officer Barry Williams said: “Two years of solid growth on discretionary income shows real stability in the economic recovery.

“Across the UK the benefit will be being felt, granted in some areas more than others, but double digit growth can only be good news for those holding the purse strings.

“It’s interesting that people continue to spend differently however, carrying their savvy shopping habits from the financial crisis with them and reprioritising their spending on treats and activities with their families, making the most out of their new found spare income.”

Sam Alderson, Economist, Cebr, said: “The further falls in gas and fuel prices in September provided more good news to households in September. With inflationary pressure remaining muted, an interest rate rise looks likely to be the next challenge facing households. This is now expected to come in mid-2016, as a more turbulent global economy means rates could stay lower for longer.”