Disposable Income
The amount of money households have available to spend or save after direct taxes (income tax and National Insurance) ha...
Formula
Disposable Income = Gross Income − Direct Taxes
Real World
When the UK government raised the income tax personal allowance from £6,475 to £12,570 between 2010 and 2021, millions of low earners saw disposable income rise, boosting spending at retailers like Primark.
Exam Focus
Don't confuse disposable income with discretionary income — disposable is after tax, discretionary is after all essential spending.
How well did you know this?