Income and Expenditure in the Personal Sector

Abstract

Having taken a bird’s-eye view of the national income and expenditure accounts in the previous chapter, this chapter descends to grass-roots level to see, in economic terms, what the personal sector gets up to. We look at data on personal-sector income and expenditure: whence the income comes (this requires an explanation of National Insurance — the United Kingdom’s system of social security); consumers’ expenditure, on which the personal sector spends most of its income; and how and at what rates income is taxed. A main purpose of all this is to show the considerable extent to which the personal sector does not spend all its income but rather keeps a relatively large flow of saving (defined as the balance on the income and expenditure account).