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Disposable income expected to rise this year

Disposable income expected to rise this year

Category: Money

Updated: 13/01/2016
First Published: 13/01/2016

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

How confident do you feel in your finances this year? Hopefully, you're starting 2016 with a spring in your step, with research from VoucherCodes.co.uk finding that a growing number of consumers are feeling positive – and many are expecting their disposable income to rise as a result.

The future's bright

The figures show that 28% of survey respondents feel optimistic about their finances, up from 25% who said the same a year ago. Furthermore, 22% believe that their disposable income will rise in the months to come, with respondents expecting to have an average of £141 more per month to spend on non-essentials.

This has undoubtedly fuelled the desire to spend: 76% say that they're planning a big ticket purchase in the next 12 months, and they're expecting to spend an average of £1,794 in the process. A holiday remains the most popular big ticket expenditure (22%) while a new car is also a priority for many, but interestingly, paying off debt has risen to the second-most important priority, which shows how savvy consumers are becoming.

This savviness perhaps explains why the proportion of people planning a big ticket purchase has actually fallen from 89% last year, suggesting that many people are taking a far more sensible approach with their finances – and that they'll be putting their extra disposable income to good use.

Less debt, more saving

Happily, it seems that many Brits are already starting 2016 on a more secure financial footing, with fewer being in debt than at this time last year. In fact, just 5% of those surveyed have taken out a personal loan in the last 12 months, while 9% have taken out a credit card – a notable dip from the 13% who said the same a year ago.

Saving is on the up, too, with the typical respondent having squirreled away an average of £170 per month over the last year, an increase of 5% from the last survey, when respondents set aside an average of £162. Arguably, much of this improvement could be due to the fact that consumers are savvier as a whole, with 37% of those who are confident about their finances saying it's because they've taken the time to budget properly over the last year (up from 26%).

An additional 30% say they're feeling better off as they take the time to shop around for the best deals, while 24% have benefited from lower food costs and 22% have even enjoyed a pay rise. Many have also been able to benefit from lower mortgage and rent payments – 11% and 10% respectively – which will have a huge part to play in the extra cash in their pockets.

"Many of us will be feeling the pinch after a blow-out Christmas, so it's encouraging that people across the UK are feeling positive about their financial outlook for the year ahead, particularly families with children who can often have greater demands on their disposable income," said Claire Davenport of VoucherCodes.co.uk.

"Though many are hoping to have a little extra spare cash to enjoy as the year progresses, it's clear that the majority of Brits are taking a more cautious approach to spending, setting aside money each month and making the most of deals and offers. The New Year is the perfect time to get your finances in order, so it's worth earmarking those big purchases now and setting realistic saving goals to help you get there."

What next?

Compare savings accounts to set you up for the year ahead

Find the best vouchers to help your money go further

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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