Countries and institutions track many indicators to measure economic growth, with gross domestic product (GDP) growth among the most closely watched.
However, GDP growth does not reflect what people are actually taking home in real income, even when adjusted for inflation.
Real household income per capita measures the change in earnings that households actually have available to spend or save, providing a more accurate reading of living standards.
So, which European countries recorded the highest annual real household income per capita growth in 2025?
Among 16 European countries, 14 saw increases in real household income per capita last year compared to 2024, while only two recorded declines.
Poland led the way with the highest real growth at 4.1%. The country also recorded the highest growth in both 2024 and 2025, pointing to a robust rise in real household income over the two years.
The OECD emphasised that “increases in remuneration of employees offset decreased social benefits, resulting in an acceleration of real household income per capita growth” in Poland.
The Netherlands (2.3%) and Portugal (2%) also posted gains of at least 2%. Denmark (1.9%), Greece (1.8%) and Spain (1.5%) recorded rises of between 1.5% and 2%.
The OECD noted increases in net property income as well as in remuneration of employees in Greece, with the unemployment rate reaching its lowest level since 2009, playing a significant role in this growth.
Belgium (1.4%), Hungary (1.2%) and Sweden (1.2%) each recorded growth above 1% in real household income per capita.
Spain highest, France lowest among major economies
Italy matched the OECD average with 0.8% growth in 2025. The country saw a large contraction in real household income per capita, dropping 0.9% in Q4 2025 after a 0.4% increase in Q3.
This was mainly due to rising inflation and a decline in property income received, according to the OECD.
For 2025 as a whole, Czechia (0.7%), the UK (0.7%), and Germany (0.6%) followed closely, all just below the average.
In the UK, growth in the last quarter was solid, rising by 1.1% after a 1.2% decrease in the third quarter.
“This rebound mainly reflected increases in remuneration of employees and social benefits, and lower taxes on income and wealth,” the OECD statement explained.
By contrast, France saw only marginal growth at 0.2%.
Finland and Austria the only countries declining
Finland and Austria were the only two countries where annual real household income per capita declined in 2025, recording drops of 0.7% and 1.8%, respectively.
“For Finland, there are many factors affecting the sluggish household income growth, but the main drivers are likely to stem from slow economic growth over the current business cycle during the last couple of years,” Tuomas Matikka from the VATT Institute for Economic Research told Euronews.
Matikka added that the slowdown is coupled with rising unemployment and cuts to social benefits and other public spending aimed at addressing a growing public deficit.
The OECD also attributed Finland’s decline to increases in taxes on income and wealth.
For 2025 as a whole, growth in real household income per capita across the OECD slowed to 0.8%, down from 2.1% in 2024. The same trend held broadly across European countries.
In 2024, all 16 countries in the list recorded increases. But comparing 2024 and 2025, only four countries posted a higher growth rate in 2025 than in 2024.
Belgium and Denmark saw the largest increases, with growth rising from 0.5% to 1.4% and from 1% to 1.9%, respectively. Sweden’s rate was 0.4% higher, and in the Netherlands it rose 0.2%.
Austria moved in the opposite direction. After growing 3.6% in 2024, it recorded a 1.8% decline in 2025.