Londoners 50% richer than those in the North East
Filed under: House Prices
So why are they so much better off, and is it time to move to London?
RicherDisposable income varies dramatically across the country. The average income after tax and benefits is £15,709. However, Londoners have around £4,500 more than this, and at the other end of the spectrum, those in the North East get by on roughly £2,400 less.
The richest parts of the country are London, the South East and the East of England - the only areas where people have more than the average sum to live on. The poorest region is the North East.
At a more local level, the highest disposable income was in Inner London - West at £33,323, which was more than twice the UK average. The London boroughs of Westminster and Kensington and Chelsea are included in this region.
Why?There are a variety of reasons behind the variations. Clearly there are regional differences in salaries, as businesses will usually pay based on salaries within local competitor firms. The City of London has a major distorting influence on London salaries - and the higher cost of living means that even the minimum wage is higher.
In addition, there are areas where there are larger groups of older people or those on state benefits, who tend to have lower incomes. Wales, Northern Ireland and the North East, earned 4.2%, 2.6% and 0.6% of their total disposable income through benefits last year - which brought down average income dramatically. Meanwhile, the lowest disposable income across the country in 2010 was in Nottingham at £10,702, partly because of its large student population.
So is it time to move to London?Maybe not. The over-riding factor in these areas - particularly in inner West London - is the cost of housing. Even a small studio flat would set you back more than £400,000 in many parts of this area, leaving many people crippled by massive mortgage costs.
Then there's the increased cost of transport - with massive public transport costs or the expense of residents parking. Add in the cost of schooling, and many people will have less money at the end of the month than their counterparts on half the salary elsewhere in the country.
So while on paper they are 50% better off - many will feel far worse off than those elsewhere in the country with bigger houses, better schools and a better quality of life.