Rising family incomes 'mask widening gap between haves and have-nots'


Families' average monthly incomes have reached a three-year high - but the gap between the "haves" and "have-nots" is growing - according to a report.

The typical family's monthly income after tax reached a three-year high of £2,126 in May, marking the highest figure recorded since March 2012, according to Aviva's latest Family Finance Report.

But the report said that across Britain "the upward trend masks a widening gap between the 'haves' and the 'have-nots'."

Looking at different groups of households, couples with plans to have children have made the greatest gains since November 2014 and have seen their monthly incomes increase by £339 from £2,122 to £2,461. This is more than twice the boost enjoyed by any other family type.

By contrast, parents who are raising children alone - either as single parents or as a result of being divorced, separated or widowed - have seen their monthly incomes fall from £1,176 to £1,077 over the same period.

This loss of £99 a month adds up to £1,188 annually, meaning they have lost the equivalent of one month's salary a year, the report said.

Aviva's data showed while the proportion of families taking home at least £2,500 a month has risen from 39% to 43% in the last six months, the percentage taking home £1,000 or less has stayed consistent at 10%.

This means at least one in 10 families are still surviving on less than half of the typical family's income, the report said.

The latest findings also show that the typical family is saving more and putting aside a £113 a month - a record high figure for the study, which has been running since December 2010.

But more than a quarter of families (26%) are saving nothing each month, and the percentage with no savings cushion has remained static at 17% over the last six months.

Across Britain, the report found that the typical family in the North East has the lowest monthly income of £1,795, which is £331 below the national average.

By contrast, the typical family in London has £613 extra income each month than the average across the country, at £2,739. This is also £944 more than families in the North East have on average.

The South East of England and Scotland were the only other regions outside London where the typical family has an average monthly income above the average across Britain.

The typical family living in London saves the most each month, at £190, while a family living in the South West saves the least on average, at £77 per month.

The South West also has the largest percentage of families who save nothing each month at 32%, according to the findings.

London families have the biggest savings pots, at £11,250 on average. This is more than three-and-a-half times the national average savings pot of £3,116.

By contrast, the typical family in Wales has the smallest savings pot of any region at just £875 - barely a quarter (28%) of the average across Britain.

Louise Colley, managing director, protection at Aviva, said that the findings bring some "great news for some British families".

She continued: "However, we must not overlook the growing number of families in danger of being left behind by this resurgence. In particular, single parents face a challenge to maintain their standards of living on lower incomes and it is no wonder that many families are still finding it a struggle to put money away each month."

Some 2,000 people took part in the latest study.

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Rising family incomes 'mask widening gap between haves and have-nots'

Relatively high living costs mean that this is a city for the well-paid, who can afford to live in the best areas. Fortunately, comparatively high wages and low unemployment improve your chances of fitting into this bracket.

The survey noted the strength of the infrastructure, health and education in the city, and Sydney outscored its Australian rivals with world-class culture and environment.

The quality of healthcare, education, and transport infrastructure underpin much of Copenhagen’s success on this list. Add in a low crime rate, low levels of unemployment, high social equality and low pollution, and you come some way to overcoming the drawback of a relatively high cost of living.

Geneva used to rate higher on this list, but the cost of living has pushed it further and further down each year.

It remains a stable and secure environment, with strong infrastructure and communications. However, it gets increasingly hard to afford to make the most of them.

World class infrastructure - including a major airport hub - helps set Frankfurt aside as the third best German city for quality of life.

The strength of the banking sector has helped the city score highly in economic terms, which in turn helps to overcome the fact that Frankfurt isn't the most beautiful city on the list.

It's the highest ranking city in North America - and the only one that makes it to the top ten. It’s a regular position for this Canadian city, which benefits from good infrastructure and transport, low levels of crime, and relative insulation from the worst effects of the economic crisis.

German cities scored well overall in the survey, but Munich pipped other German cities, because not only does it boast excellent infrastructure and services, but it also scores highly for outstanding leisure facilities.

Expats are also known to love the beauty and culture of the city - and the fact that so much of Europe is so easily accessible.

Auckland is the highest rated city outside Europe, thanks not only to the fact it’s a safe and stable place to live (with decent infrastructure), but also because the environment and culture make it a pleasant place to do business.

Zurich is no stranger to second place - where it cements yet another year. It’s a small city, with strong infrastructure and services - including good healthcare and education, as well as low pollution.

It doesn’t do quite so well when it comes to recreation, but its safety and stability place it high in the table.

It doesn’t come as a massive surprise that Vienna takes the top spot, as it has held it for the past three years.

The low crime, low pollution and excellent healthcare, education and services make Vienna the ideal destination for expats.


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