Real household disposable income per head decreased by 1.0% in Quarter 1 (January to March) 2025, the Office for National Statistics (ONS) reported on 30 June 2025, following growth of 1.8% in Quarter 4 (October to December) 20241. The measure adjusts gross disposable household income to remove the effects of inflation, so it reflects the real purchasing power of household income1.
The household saving ratio decreased to 10.9% in Quarter 1 2025, down from 12.0% in the previous quarter, which the ONS attributed to a fall in non-pension saving1. The saving ratio estimates the amount households have available to save as a percentage of gross disposable income plus pension accumulations1.
"Real household disposable income per head decreased by 1.0% in Quarter 1 (Jan to Mar) 2025; this follows growth of 1.8% in Quarter 4 (Oct to Dec) 2024"
Other sectors moved in different directions over the same period1:
| Sector | Quarter 1 2025 | Quarter 4 2024 |
|---|---|---|
| UK borrowing with the rest of the world | 3.2% of GDP | 3.1% of GDP |
| Non-financial corporations net borrowing | 1.6% of GDP | 1.8% of GDP |
| Private non-financial corporations net borrowing | £12.4 billion | £14.0 billion |
| Financial corporations | £1.2 billion net borrowing | £5.9 billion net lending |
| General government net borrowing | 5.7% of GDP | 6.1% of GDP |
The ONS said general government net borrowing decreased to 5.7% of GDP in Quarter 1 2025 from 6.1% of GDP in Quarter 4 2024, and that this was driven by taxes on income and production1. Financial corporations switched to a net borrowing position of £1.2 billion, having been net lenders of £5.9 billion in the previous quarter1. Net borrowing means a sector has spent and invested more than it received and needs financing; net lending means it has money left over1.
The bulletin contains new data for Quarter 1 2025 with no revisions to previous data1. Population estimates for 2023 onwards have been updated to use the migration variant projection, in line with the ONS national population projections published on 28 January 20251.
Why it matters for households
The fall in real household disposable income per head in the first three months of 2025 reverses the growth recorded in the final quarter of 20241. Because the figure is per head and adjusted for inflation, it captures what happened to household incomes after price changes and after the population is taken into account, rather than the total size of the income pot1.
The saving ratio fell to 10.9%, meaning households set aside a smaller share of their disposable income than in the previous quarter, with the ONS pointing to a fall in non-pension saving as the driver1. The saving ratio includes pension accumulations alongside income available to save1.
The figures cover the UK as a whole and are published as aggregate estimates; the bulletin does not break the income or saving measures down by household type, region or income level, so it does not show which households saw incomes fall or by how much. The ONS notes that the accounts are the underlying data behind a single estimate of GDP using income, production and expenditure data1.
What happens next
The next release of the quarterly sector accounts is scheduled for 30 September 20251. The ONS has not reported any further detail on the Quarter 1 2025 figures beyond this bulletin. Broader context on interest rates and the economy is covered in our rates and economy guide.
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