Rich-poor gap widest ever

By Harry Wilson

 

 

 

More than half of those earning less than £15,000 a year said their finances had worsened in the last three months, compared with just under 20pc of those in the highest income group, according to the latest household income survey 

by Markit. 

The disparity for those seeing an improvement in their finances was even more pronounced, with just 2pc of those in the lowest income group reporting an improvement in their financial situation, compared with 14pc of top earners.

 

Markit said its Household Finance Index showed the gap between the top and bottom income groups at the widest it had ever been, with the fortunes of the highest earners rapidly disconnecting from the lowest.

 

Those aged between 18 and 25 have been the worst affected showing the largest increase in debt level of any age category, as well as reporting the fastest falls in both their savings and willingness to spend.

 

Top earners, defined as those earning more than £57,751, are the most willing to spend what they have got, with their intention to spend hitting an 11-month high in November, compared to a record-low among the bottom three groups.

 

"Scratching below the surface illuminates uneven strains across household income categories," said Tim Moore, senior economist at Markit, who warned of an "acute squeeze" on UK household finances.

 

"While all eyes are on whether the UK economy will double-dip, the latest survey is a timely reminder that the household recession hasn't even paused for breath."

 

The figures will support opponents of the Government's economic plans who argue they favour the rich over the poor.

 

Public sector workers are much more pessimistic about the outlook for their finances compared with their private sector counterparts.

 

About 55pc of public sector employees expect their finances to deteriorate compared with 45pc of private sector workers. Who is right in the great debate on pay levels? Telegraph