Aberdeen overtakes Edinburgh as richest city

Aberdeen is now the wealthiest city in Scotland. Picture: TSPL

But Glasgow remains the poorest place to live where residents struggle with the lowest spending power in Scotland, a Scottish Parliament report has found.

And Scotland is still lagging behind the UK generally in terms of spending power, according to the Disposable Household Income 2013 report.

The average Scot has disposable income – defined as the money available after tax and National Insurance contributions – of £17,039 a year, which is £500 down on the UK wide picture, although the gap is closing.

People in Aberdeen City and Aberdeenshire enjoy annual average spending of £20,159, compared with £20,083 in Edinburgh. In Glasgow, the figure was £14,927.

“Since 2007 the gap between Edinburgh and Aberdeen has been narrowing with Aberdeenseeing, on average, higher growth than Edinburgh,” the report by Scottish Parliament researchers states.

“Aberdeen has now overtaken Edinburgh as the area with the highest level of disposable income per head.

“This is the first time Edinburgh has not had the highest level of disposable income per head since the series began in 1997.”

However, the figures were compiled before the recent crash in global oil prices which have seen hundreds of job losses in Aberdeen and swingeing cuts to pay and conditions of other workers.

Disposable income per head in Edinburgh fell in real terms from 2012-13.

David Lonsdale, director of the Scottish Retail Consortium, said: “Prices in shops have been falling for 26 consecutive months which, coupled with more affordable prices at the petrol pump and a better outlook for jobs and wages growth, has led to a corresponding increase in the purchasing power of Scottish households.

“However, the fact is shoppers remain cautious, retail sales remain lacklustre and consumer spending has yet to take wing.”

The figures do not account for the higher price of property which have emerged in large parts of Aberdeen and Edinburgh.

Almost half of the areas in Scotland have seen a decrease in real terms with West Lothian seeing the biggest decrease, falling by 4.5 per cent.

Scotland has a higher proportion of benefits such as state pensions, unemployment allowance and child benefit which contribute to overall income levels. This increased from 23 to 26 per cent in Scotland between 2007-12, compared with a rise of 20-24% across the UK as a whole.

Aberdeen City and Aberdeenshire has the lowest proportion of social benefits as a proportion of total disposable income in Scotland at almost 15 per cent. This is one of the lowest proportions in UK, 16th out of 173. Lochaber, Skye & Lochalsh, Arran & Cumbrae and Argyll & Bute (28 per cent) and South Ayrshire (27 per cent) are in the top 10 UK areas with the highest proportion of social benefits.