The slight increase to £16,400 in 2023 was largely down to government cost of living payments, however this is still less than the amount of disposable income compared to before the pandemic.

On average the disposable income of the richest households in thew country is five times higher than those earning the least. Those earning the highest are seeing an average of £82,900 of disposable income annually.

Rachel Griffin, tax and financial planning expert at Quilter said: ‘The latest figures on household disposable income sheds light on the broader economic landscape, highlighting the compounded challenges facing many UK households.

‘At a time when inflation and cost-of-living pressures are squeezing real incomes, the government's policy of freezing tax thresholds adds another layer of strain, particularly for middle and upper-middle-income earners.’

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