Asda Income Tracker Notes Decline In Disposable Household Income

The latest findings from Asda’s Income Tracker reveal that more than 60% of UK households saw their disposable incomes fall going into the new year, despite the tracker reaching a record high.

For these households, income growth lagged behind annual inflation - despite it slowing to 2.5% in December and they also did not benefit from the strong pay growth in the current job market in the same way as others.

The lowest-earning families, which make up 20% of all UK households, faced a shortfall of £70 per week in December and as their take home pay was still not enough to cover bills and essentials.

While the upcoming increase in the National Living Wage may provide some relief for these households, it is unlikely to fully offset this ongoing financial gap.

Although it is expected that budgets for the lowest-earning households will continue to be stretched, some families had something to feel cautiously optimistic about going into the new year.

The average UK household had £251 per week remaining after covering bills and essential expenses in December — an increase of 12.1% compared to the previous year.

This figure represents the highest disposable income figure recorded by the tracker, surpassing the pre-cost-of-living crisis peak of £247 per week in March 2021. These improvements were largely driven by strong wage growth and slowdown in inflation.

Reacting to this month’s Income Tracker, Sam Miley, Managing Economist and Forecasting Lead at Cebr, said: “The Income Tracker reached a new high in December, capping off a year of solid growth in spending power. Looking ahead, we expect further improvements to take place in 2025, driven by continued growth in real earnings.

“This should help to support the wider economy, by encouraging consumption. Despite these positive developments, it should still be noted that spending power is down on pre-cost-of-living crisis levels when considering values in real terms.”

With many hardworking families still feeling the squeeze, Asda is stepping in to help by launching new value propositions and continuing to invest in maintaining its position as the UK’s lowest-priced traditional supermarket.

Earlier this month, Asda announced its Big Jan Price Drop initiative, slashing the prices of thousands of everyday products. Over 2,500 household staples have been reduced by an average of 26%, both in-store and online.

You can view the full Income Tracker here.

Source : Asda

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