Asda: UK Households Replenish Savings As Disposable Income Grows

• Average household disposable income in July increased by 11.7% year-on-year to £245 per week – reaching its pre-crisis high

• UK households saved an average of £122 per week in Q2 2024, a 12.3% increase year-on-year. 

UK households are prioritising saving over spending as disposable income levels reach the highs seen prior to the cost-of-living crisis. 

Figures from Asda’s Income Tracker show that despite a 14% increase in disposable income for the average household during Q2 compared to a year earlier, consumption was down by 0.3% during the same timeframe.  

This suggests that households are using spare cash to top up the savings depleted during the cost-of-living crisis. The uptick in savings comes as disposable income grew to £245 per week in July, the highest figure since March 2021. 

Whilst all age groups are expected to witness further improvements in spending power as result of income growth continuing to outpace inflation, some groups are more insulated from volatility than others.  

Households above 65 recorded the strongest disposable growth in July and their disposable income now sits above the UK average. Unlike working age households, older households are less likely to be exposed to the impact the volatile job market has on disposable income, and benefit from their state pensions being locked. 

Reacting to this month’s Income Tracker, Sam Miley, Managing Economist and Forecasting Lead at Cebr, said: Reacting to this month’s Income Tracker, Sam Miley, Managing Economist and Forecasting Lead at Cebr, said: “While household spending power has continued to grow, consumption has reduced within the same timeframe. This reflects the trend of households spending less and instead diverting more of their disposable income towards savings. Earnings growth continues to outpace inflation, so further improvements in discretionary income are expected across all age groups and other demographics." 

With households continuing to save their disposable income to ensure it goes further, Asda remains committed to helping customers make their money go further - and save via the Asda Rewards app.  

The retailer recently announced that more customers have been prospering by saving in their Asda Rewards Cashpot. Around 6 million active users have saved approximately £420m by completing Missions and purchasing Star Products to help reduce their grocery bill at the till.  

You can view the Asda Income Tracker, here.

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