Aberdonians enjoy biggest disposable income rise in Britain

ABERDEEN, the “Oil Capital of Europe”, has enjoyed the fastest rise in disposable income in the UK in recent years, boosted by the strength of its oil industry, accountants report today.

Glasgow and Dundee also came in the top five, with London in second place.

The average disposable household income after outgoings such as tax, mortgage payments and pension contributions rose by nearly 25 per cent in Aberdeen between 2004 and the end of 2009.

In 2004 people living in the Aberdeen area had £13,669 left over, but that figure has leapt by 24.65 per cent over five years to £17,039.

London came in second place in terms of percentage change, but had the highest disposable income overall.

It saw a 22.13 per cent jump over the same period, with households pocketing £19,658 in 2009 compared with £16,096 five years earlier.

Accounting group UHY Hacker Young, which carried out the research based on data from the Office for National Statistics, said Aberdeen’s success was buoyed by a “booming oil industry”.

Partner Marc Waterman said: “London has been seen as streets ahead of all the other UK towns and cities for growth in disposable household income, but these figures show that the gap is closing.

“Although London still has the greatest disposable income in the UK, Aberdeen is catching up fast.”

He continued: “Despite the recent North Sea tax increases, there has been continued investment in North Sea oil and gas production.

“Although disposable incomes in Dundee and Glasgow have grown from a low base, the growth has been very rapid, aided by low housing costs and the fact they avoided the worst of a spike in unemployment.

“However, with more public sector budget cuts on the way, growth in disposable income may moderate or reverse for some towns that are heavily dependent on public sector employment.”

Alison Stuart, lecturer in law at the Aberdeen Business School, said Aberdeen was highly likely to remain at the top of the league table despite the recession.

“The biggest firms such as BP and Shell might be casting off certain rigs but there has been a huge proliferation of smaller firms being created who have less overheads. There is also a huge amount of expertise in the city and a move towards diversification in renewables.”

Ms Stuart added: “In the oil industry salaries are very high. This means if you are on a lower income you are facing a situation where property prices are rising even in a recession.”