Disposable income
Disposable income is what you have left after paying tax and essential living costs, which you can use for debts, savings or optional spending.
Also known as: spare income, surplus income
Debt advisers use this figure when they work out what you can afford to offer your creditors. It is calculated by subtracting essential costs such as housing, food, utilities and transport from your income.
A realistic calculation is important. Understating essentials can lead to a repayment plan you cannot keep up, and overstating them can lead creditors to challenge your figures.
Our free budget planner can help you put this into practice, and nothing you enter is stored.
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