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A Game Of Endurance As Disposable Incomes Hit Six Year Low

17 October 2017 Written by Ware & Kay Solicitors Category: Financial advice

The average household in Britain is currently enduring the lengthiest dip in disposable income for six years. Cash-strapped consumers are struggling with the combination of lacklustre growth in their wages, which is providing modest support to disposable incomes, and inflation, which is taking its toll on the pound in their pocket as the cost of everyday items increase.

Recent data from the Office for National Statistics (ONS) revealed real household disposable income fell by 1.1% per head in the second quarter of 2017, meaning disposable incomes have declined for four consecutive quarters, marking the longest period of negative growth since the tail end of 2011.

The data from the ONS coincides with a study1 disclosing that for the first time in two years, households said they thought their personal financial situation had deteriorated. This perception will no doubt have a negative impact on people's saving and spending habits.

It is anticipated that the interest rate rise in November could help temper rising inflation, which has been fuelled further by the Brexit-hit pound. Watch this space.

1Eurobarometer Consumer Survey, Oct 2017

It is important to take professional advice before making any decision relating to your personal finances. Information within this newsletter is based on our current understanding of taxation and can be subject to change in future. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK; please ask for details. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. If you withdraw from an investment in the early years, you may not get back the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Taxation depends on individual circumstances as well as tax law and HMRC practice which can change.

The information contained within this newsletter is for information only purposes and does not constitute financial advice. The purpose of this newsletter is to provide technical and general guidance and should not be interpreted as a personal recommendation or advice.


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