45.2% of UK households are worried about the impact of the EU Referendum on the pound in their pockets, according to the latest Disposable Income Index (DII) published by Scottish Friendly.

Despite a £95 increase in disposable income compared to last quarter, Brits are still concerned about the impact of unexpected bills and external economic shocks.

The quarterly report, which has been compiled in conjunction with leading think-tank the Social Market Foundation, reveals a small improvement overall (from £905 to £1000) in disposable income over the last quarter, bolstered by continued low rates of inflation, the introduction of the National Living Wage and moderate pay growth across the private sector. Those in part-time work in particular seem to have benefitted from the introduction of the National Living Wage at the start of April 2016.

However, some groups find themselves more squeezed than others. Those aged 35-44 years have just £825 left each month after buying daily necessities, just less than the £831 available to 25-34 year olds and below the national median of £1,000. Those in work continue to find themselves with less disposable income than those in retirement, with the average retiree having a higher monthly disposable income of £1,585.

This disparity in favour of the older generation is primarily attributable to them being less encumbered by the burden of housing costs. The median 25-34 year old spends £836 on housing costs each month with £626 going on rent or mortgage payments alone. By contrast the average over 55 year old pays just £302 on housing costs with a median spend on rent or mortgage costs of zero. This combined with the trend for older people to work longer, relatively generous private pension provisions and the fact that younger generations have seen slower pay growth compared to previous generations means that older households are, on average, significantly better off.

Despite improvements in the headline figures of disposable income many households remain pessimistic about their financial prospects and are worried about unexpected financial or economic shocks. Only a third of households (34.0%) believe they will be better off financially in 12 months’ time. Meanwhile, nearly a quarter (24.4%) believe that things will get worse for them financially and close to half (47.7%) are worried about how they would cope with a big, unexpected bill like a broken down car or washing machine. Such pessimism is unsurprising with more than a third of households (36.5%) reporting they are worried about their debts and half (50.9%) stating they are not in a position to regularly save or invest.

The looming EU Referendum also appears to be a worry. Half of households (51.6%) are concerned about the outcome of the vote and 45.2% are anxious about how leaving the EU would affect their family financially. The main reason cited is the possibility that a Brexit may cause prices to rise (40.3%), lead to job losses (28.6%) or to changes in labour market protections like paid holiday or maternity leave (19.1%).

Calum Bennie, savings spokesperson at Scottish Friendly, said: “It’s encouraging to see the median level of disposable income increase this quarter. The introduction of the National Living Wage is clearly a positive step and that, combined with low inflation and moderate private sector wage growth has helped certain sections of society to have more money in their pockets at the end of the month. However, our study continues to suggest that people are feeling financially fragile. Worries persist about preparedness for unexpected bills and debt. Not enough households are in a position to save at the end of the month and that is a concern. With financial security still seemingly very out of reach for many households, policy makers and businesses alike should take heed of the persistent insecure sentiment in the UK.

“Uncertainty caused by the forthcoming EU referendum is also leaving many UK families feeling concerned. The possibility that prices may rise that jobs could be lost or that rules around maternity leave or paid holiday may change are clearly important points affecting many people considering the impact of the EU referendum on the pound in their pocket.”