Nottingham people have fourth-lowest spending power in the UK

People in Nottingham have the fourth-lowest disposable income in the UK

People in Nottingham have the fourth-lowest amount of disposable income in the country, new research reveals.

A study released this week by the Office of National Statistics measures just how much money people around the country, on average, have to spend after tax and household costs are deducted.

The figures from 2015 (the most recent year assessed by the ONS) show that the average Gross Disposable Household Income (GDHI) per head in Nottingham city is just £12,779 annually, or £1,065 per month.

This is more than £6,000 lower than the UK average of £19,106, with only people in South Tyneside, North-East Derbyshire, and Lewisham taking home less than Nottingham residents.

The city council says the figures do not reflect the reality of most residents’ lives, as they are influenced by factors such as a high student population.

The figures show that people living either side of the River Trent have a massive difference in their disposable income.

Crossing the river from Nottingham into Rushcliffe means a difference of £750 per month. People in Rushcliffe, which includes the affluent area of West Bridgford, take home an average of £21,788 per year, over £9,000 more than people in the city. This works out at £1,815 per month, compared to the £1,065 in the city.

Other areas of Nottinghamshire also fare better in comparison with the national picture, with people living in Broxtowe having an average of £19,735 to spend after tax and rent.

A spokesman for Nottingham City Council said: “This is little more than a statistical anomaly – it doesn’t reflect local people’s actual experience. Across the Greater Nottingham conurbation, the figure increases to £16,300 per person which would move Nottingham out of the bottom 100 UK districts.

“This is the geography the economy operates on and more than half of the people who work in Nottingham City live in surrounding districts.

“Presenting the data per head of population skews things against Nottingham as well, due to the high proportion of students here who are likely to have very low income levels.

“A truer picture of local incomes would further emerge if housing and energy costs were taken into account, as Nottingham has some of the cheapest housing and, through Robin Hood Energy, energy costs in the country.

“However, we continue to work effectively to attract new business to the city and create the right atmosphere for businesses to thrive and provide job opportunities for local people.”

Comparing Nottingham to its nearest neighbouring city, people in Derby can expect to take home a substantial amount more. The GDHI average in Derby is £14,955 – more than £2,000 more than the average in Nottingham.

Chris Hobson, director of policy at the East Midlands Chamber of Commerce, says there are many factors that cause this difference, including average wage, property prices, and the availability of work in the area.

He said: “If you compare Nottingham and Derby, house prices tend to be lower in Derby than in the larger city of Nottingham while wages tend to be higher. House prices are governed by availability of stock, age, type and size of housing and demand for, such as student accommodation, pushing up rental costs and taking properties out of the sales pool.

“Wages are determined by the type of industry available. Derby has employers such as Rolls-Royce, Bombardier and Toyota, which employ tens of thousands between them, mostly in highly-skilled, highly-paid roles. Those employers drive up the average wage. You don’t have those jobs in Nottingham, which had a huge textile industry but in more recent times has shifted towards life- and bio-science cluster industry, many of which are start-up businesses or employ few people.”

The Chamber estimates that the average wage in Derby is around £30,000 per year, compared to £24,000 in Nottingham.

Another factor that contributes to the difference in disposable income is the student population of the city.

Mr Hobson added: “Nottingham has a larger student population and while the universities are big employers and well paid, the student population is more transient. This mean that for three-quarters of the year you have people living in the town, contributing around £63million to the local economy but not earning.

“It should also be noted that the calculations are based on simple numbers, i.e. x thousand people work in Nottingham and y thousand people live in Nottingham. But not everyone living in Nottingham works in Nottingham. Many might choose to live in vibrant Nottingham but work in higher-pay Derby, so when considered alongside the other influences, it means the figures don’t necessarily tell the whole story.

A full list of GDHI rates for Nottinghamshire are as follows:

  • Nottingham – £12,779
  • Ashfield – £16,344
  • Bassetlaw – £17,011
  • Broxtowe – £19,735
  • Gedling – £17,482
  • Mansfield – £15,087
  • Newark and Sherwood – £16,896
  • Rushcliffe – £21,788
  • UK average – £19,106

 

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