There has been a political spat about this recently. The Conservatives are right that if you take changes in pay, and adjust those both for price inflation and for the tax cuts through the rising tax threshold, people are on average better off.
It is also correct that not all people are in the position of the average. Some have not had any pay rise, some have not benefitted so much from the tax cuts because some benefits go down as income goes up. Many people do not feel better off. We all tend to notice the items like petrol and electricity which have gone up, and not notice so much the items which have stayed the same or gone down.
Sometimes in these political exchanges it is a good idea to go to neutral source. Asda publish a regular income tracker. Their latest tracker says that family spending power has risen in each of the last three months, an improvement on recent years.
Clearly there is more income overall, and more income being spent, as we can see from the GDP and consumer spending figures. Retail sales have been rising. These of course need adjusting for the numbers of people in the country and in the workforce, as there has been some further growth in the size of the population.
There is one category of people who must now be better off – all those who were out of work and have now got jobs thanks to the rapid growth in employment in the last three years. Many budgets are still very tight, and pay has been lagging prices for much of the time since the crash of 2008. No wonder many people do not feel well off, given the large loss of spending power they experienced in 2008-9. It is taking time to get back to where real incomes were prior to the crash.