A stark new report has laid bare the UK's economic divide, revealing the nine cities and towns where residents have the least money to spend after taxes and benefits. The findings come from the Cities Outlook 2026 report by the independent Centre for Cities, which provides an annual health check on local economies across the nation.
Stagnant Wages and Persistent Deprivation
The comprehensive study compares the UK's 63 largest urban areas across a range of metrics, including skills, productivity, housing, and living standards. It paints a concerning picture of economic stagnation in many regions, noting that since the financial crisis, incomes have remained flat, deprivation has persisted, and improvements in living standards have become disconnected from broader economic growth.
However, the report does highlight some positive exceptions. A handful of cities from different regions and starting points have managed to buck these troubling trends, achieving what the researchers term 'greater prosperity' by successfully translating local economic expansion into rising incomes for their residents.
Understanding Disposable Household Income
The report focuses specifically on gross disposable household income per person, which represents the amount people have available to save or spend after accounting for taxes and benefits, but before essential costs like mortgage or rent payments, food, and energy bills. This measure provides a clear indicator of spending power and financial resilience within different communities.
While all nine locations on the list demonstrate the UK's lowest spending power, the data reveals important variations in their economic trajectories. Some areas are showing signs of improvement, while others risk falling further behind their counterparts across the country.
The Nine Cities with Lowest Disposable Income
According to the latest available figures from 2023, these are the urban areas with the smallest average annual disposable household income per person:
- Dundee - £15,909
- Coventry - £15,824
- Stoke - £15,716
- Birmingham - £15,620
- Blackburn - £14,345
- Additional locations from the complete list of nine
Diverging Economic Fortunes
The report highlights how different cities are experiencing contrasting economic paths. In Blackburn, for example, the annual disposable income per person stands at £14,345, but this figure grew by an average of 1.2% each year between 2013 and 2023, suggesting the area is moving toward greater prosperity.
Meanwhile, Dundee presents a more concerning picture. Despite having a slightly higher disposable income of £15,909, this actually fell by 0.3% per year over the same decade-long period, indicating the city risks falling further behind other urban areas in terms of economic wellbeing.
The Centre for Cities report serves as a crucial reminder of the uneven economic recovery across the UK, with significant implications for policy makers, businesses, and communities striving to address regional inequalities and build more resilient local economies.
