Disposable income is the amount of money left over after all essential household expenditure (not including payments towards unsecured debts) has been deducted from household income.
Essential household expenditure includes mortgage and rent payments, hire purchase payments (but not unsecured car loans payments), food, drink, council tax, water rates, heat and light costs, telephone, mobile, internet, sky, TV license, life and property insurances, vehicle costs (fuel, parking, car insurance, car tax, repairs & servicing), other essential travel costs, medical optical & dental costs, clothing & footwear, costs incurred by children (school meals, school trips and activities, sports & hobbies, pocket money, transport), laundry & dry cleaning, hairdressing, newspapers & magazines, pet insurance & upkeep and any special unavoidable expenses such as a special diet for a family member.
The remaining income is described as disposable and it is what is available to spend on non-essential household expenditure, for saving or to repay outstanding unsecured debts.