Household disposable income increased by 6.1% in 2025 compared with the previous year according to preliminary estimates. Disposable income per capita amounted to just over 6.4 million ISK during the year, an increase of 4.6% from 2024. After adjusting for price changes, the purchasing power of disposable income per capita increased by 0.5%, while the Consumer Price Index (CPI) rose by 4.1%.
Effects of revisions on year-on-year comparisons
The disposable income figures for 2024 have been revised following a correction for underreported insurance benefits paid by insurance companies. This revision increases household income in 2024 but has no effect on household income in 2025. The base effect of the revision reduces the measured growth in purchasing power in 2025. In addition, consumption of fixed capital (depreciation) has been revised to ensure consistency with other estimates of national accounts approaches.
Updated figures for 2025 are scheduled for publication in December 2026, when more detailed data on business operations will become available.
Total household income increased by 7.3% in 2025 compared with the previous year. Compensation of employees increased by 7.4%, while property income rose by 4.2%. Pension income and social benefits increased by 11.0%, largely reflecting an 11.9% increase in pension income and a 13.3% increase in social security benefits. Social assistance decreased by 5.9%, partly offsetting the increase, with the decline mainly reflecting a special interest support payment made in 2024 that was not repeated in 2025.
Household expenditures increased by 8.9% in 2025 compared with the previous year. Taxes on income increased by 10.1%, while property income payments increased by 6.9%.
According to new preliminary estimates for 2026, the purchasing power of disposable income per capita increased by 0.9% in the first quarter of 2026 and by 0.8% in the second quarter.
Household disposable income increased by 7.3% in the second quarter of 2026 compared with the same period of the previous year. Disposable income per capita amounted to just over 1.7 million ISK during the quarter, an increase of 6.0% from the second quarter of 2025. After adjusting for price changes, purchasing power per capita increased by 0.8%, while the Consumer Price Index (CPI) increased by 5.2% over the same period.
Total household income increased by 6.2% in the second quarter of 2026. Compensation of employees made the largest contribution to this increase, rising by 5.1% compared with the same quarter of the previous year.
Pension income and social benefits increased by 16.9% in the second quarter of 2026 compared with the same quarter of 2025 and accounted for 16.9% of total household income during the quarter.
Household expenditures increased by 4.9% in the second quarter. Taxes on income increased by 6.3%, while interest payments increased by 10.0%. Social contributions paid by employers and employees in the household sector increased by 2.1% compared with the same quarter of the previous year.