After housing costs, workers in Scotland earn more and typically have higher living standards than in England, says report

Disposable incomes are now higher in Scotland than in London, according to a report which reveals workers north of the border are typically earning more than their English counterparts for the first time since records began.

Analysis by the Resolution Foundation has found that living standards after housing costs have grown faster in Scotland than in any English region since the crash.

Disposable weekly income after housing costs in Scotland was £407 in 2013-14, compared with £400 in London. Just before the crash in 2007-08, Scotland trailed the capital with typical Scottish households having incomes of £389 after housing costs, just above the UK average figure of £386 but well behind London at £418.

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Ahead of the publication of its first major report on the Scottish labour market on Wednesday, the Resolution Foundation also revealed that pay in Scotland has grown faster than any other nation or region in the UK over the last two decades. Typical pay in Scotland is now £11.92 an hour, marginally higher than across England, at £11.84.

It is notable that earnings growth in Scotland has also been stronger than England across all pay levels, other than for those at the very top.

The Resolution Foundation also noted that, despite an impressive record recently on wages, Scotland still has a significant problem with low pay, with about one in five workers across the country earning below the low-pay threshold.

The new higher “national living wage” for the over-25s, which comes into effect this April, will help about half a million employees, but the foundation estimates that approximately one in six workers across Scotland are still set to be paid a low wage by 2020, and urged Scotland’s political parties to make low pay a “top priority” in the Holyrood election campaign.

Conor D’Arcy, a policy analyst at the Resolution Foundation, said: “Although the years since the crash have been tough for many families across Scotland, it’s encouraging to see strong growth in Scotland’s incomes after housing costs compared to London. Along with a smaller pay squeeze, Scotland’s generally more affordable housing market has been one of the drivers, illustrating how crucial accommodation costs are for living standards.

“The number of Scots who own their own homes had already begun to fall prior to the recession with the private rented sector growing. Ensuring that housing costs remain affordable, whether you’re a renter or a mortgagor, will be a challenge the next Scottish government will need to rise to.”