THE North-East has the lowest disposable income levels in the country, analysis shows as experts warn the so-called Northern Powerhouse has a long way to go before people feels its benefits in their pockets.

A report by influential think tank IPPR shows average disposable income in the region is £14,927 - compared to £17,600 nationally.

The research, which uses 2013 data, suggests the North-East is bouncing back after the recession with a 10.2 per cent increase in disposable income since 2009.

However, while IPPR says it welcomes the Government’s Northern Powerhouse agenda, it says a key test of its success must be how it translates into higher living standards for people living and working in the region.

Luke Raikes, research fellow at IPPR North, added that "correcting the imbalances" in the nation’s economy must be about more than just stronger economic growth figures or faster journey times.

"We have to improve the quality of life and incomes of people in the North too. These figures show the Northern Powerhouse has a long way to go before people in the North feel the benefit of a stronger regional economy.

“The North should pursue growth and prosperity built on higher wages, more jobs and stronger productivity - not simply try to catch up to London and the South-East, where the type of economic growth they’ve experienced has created high levels of inequality and left many behind.

“Without a step change in policy the North will not be able to escape the historic under performance of its economy, and contribute more to national growth. The Northern Powerhouse will be meaningless for the people who live and work in the North unless the economic growth it generates reaches their pockets."

North Yorkshire is one of only two Northern areas featuring in the country's top 50 richest in terms of disposable income.

County Durham, Darlington, South Tees and Sunderland are all in the bottom 50 for disposable income levels.

In response the Treasury said ending the decades old gap between the North and South was why the Government was committed to creating a Northern Powerhouse.

A spokesman added: “The Budget delivers on our plan for working people in the North including a new National Living Wage, and an income tax cut providing new support for millions. By 2020 up to 750,000 people across the North are expected to benefit from the NLW.

“Employment in the North grew faster than the South over the past year. What’s more, we will work with local leaders to help them gain new, wide-ranging powers to create jobs and growth.”