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 in 2015, households had more disposable income, boosting demand for non-essential goods at retailers like John Lewis.
Exam Focus
Don't confuse disposable income with discretionary income — disposable is after tax, discretionary is after all essential spending too.
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