Economic Well-Being Back to 2010 Levels

While the economic well-being of UK households has improved, it is still not significantly better than it was five years ago, according to the Office of National Statistics (ONS).

Using a new set of measures, ONS is able to measure economic well-being as well as economic growth.

Real Household Disposable Income (RDHI) increased 1.9 per cent per head during 2014. However, this was only up by 0.2 per cent on the figure for the second quarter of 2010, five years ago.

Real Household Disposable Income is the measure favoured by Chancellor George Osborne. It records household income after tax, adjusted for inflation.

According to the Office of National Statistics, adults are also feeling more optimistic about their household finances.

In December 2014, the ONS reported a figure of -5.2, which meant that the number of people who reported feeling optimistic about their personal finances was just outweighed by the number who felt that their finances were worsening. However, the year before that figure was -7.6.

According to the ONS, household spending has also increased. Real household spending, adjusted for inflation, rose by 0.3 per cent during 2014 and by 3 per cent since May 2010, when the current coalition government came to power.

These measures for quantifying economic well-being were first suggested by economist and Nobel Prize winner Joseph Stiglitz, who said that it was important to look at individual household finances as well as the economy as a whole.

According to Stiglitz, measuring Gross Domestic Product alone is problematic. It records the depreciation of cars, for example, which is not usually connected with worsening household finances. Furthermore, not all of the GDP goes to UK nationals. Some is taken by investors from overseas and some UK residents receive income from foreign investments. Finally, GDP goes up as the population increases and so should be calculated per head.

Online banking fraud increases by almost half

Cases of online banking fraud rose by 48 per cent during 2014 as more and more consumers choose to carry out their banking via the internet.

According to Financial Fraud Action the rise is due to an increase in the distribution of computer malware and to people being conned into giving their personal details to fraudsters.

Firms are also more likely to become victims of fraud, often losing large amounts of money.

£60 million was lost fraudulently last year but, says the FFA, this is a “relatively modest” amount given that over half of all adults in the UK use online banking facilities.

Overall customers lost a total of £479 million through fraudulent use of their bank cards. This was a six per cent increase on the previous year, 2013.

Customers who lose money via their bank card are eligible for a full refund unless it can be established that they have been negligent.

Judith Donovan, from action group Keep Me Posted, said that the sharp increase in online fraud shows that customers must be given the option of going into a bank to conduct their financial transactions, should they wish. Banks are encouraging their customers to bank online for convenience but crime in this area is increasing. This is a particular concern for those groups who are not familiar with online banking technology and feel vulnerable.

Whilst online fraud has increased, the overall amount is down by 21 per cent from its peak of £609.9 million in 2009. Keep Me Posted suggests that this is because banks have increased levels of security. Fraudsters are now concentrating on tricking individuals into giving them their bank details through email and telephone scams.

The campaign group is calling for the government to raise awareness of fraud and to encourage consumers to use the latest anti-virus software which is often available from their banks, free of charge.