Income gap between London and rest of UK hits record high

Households in Westminster have more than three times the national average disposable income

London had the UK's highest gross disposable household income per head in 2021 where, on average, each person had £31,094 available to spend or save. Bloomberg

The gap between disposable household incomes in London and the rest of the UK has reached a record, the latest figures from the Office for National Statistics show.

Overall in 2021, gross disposable household income (GDHI) in the UK grew by 3.6 per cent when compared with 2020, the ONS said.

Total GDHI stood at £1.5 trillion in 2021, of which 86.4 per cent was in England, 7.4 per cent in Scotland, 3.9 per cent in Wales, and 2.3 per cent in Northern Ireland.

The ONS calculates GDHI as the amount of money that all the individuals in a household have available for spending or saving after they have paid tax or received any direct benefits.

London had the highest GDHI per head where, on average, each person had £31,094 available to spend or save. That compared to a UK average of £21,679. Northern Ireland had the lowest GDHI per head by region at £17,636.

The London figure is 43 per cent above the national average, the highest it's been since the ONS started ONS began tracking the data 25 years ago.

Within London in 2021, Westminster had the highest GDHI per head at £67,389, more than three times the UK average. Meanwhile, Leicester had the lowest GDHI per head at £14,605.

Rhetoric and reality

Experts said it brings into focus the performance of the government's 'levelling-up' plans, first promised by the Conservative party before the 2019 election which saw Boris Johnson become Prime Minister.

“London’s economy recovered fastest from the pandemic, and this relative success looks to be feeding through into residents’ living standards," said Lindsay Judge, research director at the Resolution Foundation.

"The big picture here is that Britain is not converting its levelling up rhetoric into reality.

"To address this we need to focus on our major cities outside London, whose economic under-performance is holding back national prosperity.”