New report shows growing inequality despite rising UK incomes

A new report has indicated that a growing gap is emerging between those in the UK with a healthy income and those without.

According to the latest …

A new report has indicated that a growing gap is emerging between those in the UK with a healthy income and those without.

According to the latest Aviva Family Finance Report, the last six months have seen the typical family's income reach £2,126, its highest point since March 2012, with improved savings habits meaning the average family is putting away £113 each month – a new record.

However, these improvements are not being felt by all. Couples with plans to have children have made the greatest gains since November 2014, with their monthly incomes rising by £339 from £2,122 to £2,461 – more than doubling the boost enjoyed by any other family type.

By contrast, parents who are raising children alone have seen their monthly incomes drop from £1,176 to £1,077 over the same period, adding up to £1,188 annually, or the equivalent of one month's salary.

While the proportion of families taking home at least £2,500 a month has risen from 39 per cent to 43 per cent over the last half-year, the percentage taking home £1,000 or less has stayed consistent at ten per cent.

Moreover, 26 per cent of families are saving nothing each month, while the percentage with no savings cushion has remained static at 17 per cent over the last six months. The average balance owed has also risen by five per cent from £9,050 to £9,520, indicating that some families are becoming reliant on borrowing to supplement their incomes.

Louise Colley, managing director for protection at Aviva, said: "This summer's Family Finances Report brings great news for some British families, but also rings alarm bells for others. Overall, the typical family has got more money in its budget and is using it to save more and reduce their financial vulnerability.

"However, we must not overlook the growing number of families in danger of being left behind by this resurgence."

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