UK households begin to see rise in disposable income
In a glimmer of financial relief, the latest data from Asda’s Income Tracker reveals a boost in average household disposable income, marking a 17-month high.
The average household now has an additional £14.27 per week compared to the same period last year, taking the average disposable income to £224 per week, the highest since March 2022.
This increase is attributed to strong gross wage growth and a surprising slowdown in inflation for the third consecutive month, with annual inflation dipping to 6.7% in August.
The largest contribution to this slowdown is noted in food and non-alcoholic beverages.
However, the financial landscape remains uneven. Despite the overall increase, 60% of UK households experienced a drop in disposable income in August compared to the previous year, lingering below the levels before the cost-of-living crisis erupted.
The average household disposable income was down by £19.48 per week compared to August 2021.
The Asda’s Income Tracker report highlights a stark contrast between different income groups.
The lowest earning households are grappling with a weekly deficit of £72 in disposable income, underscoring the enduring impact of the cost-of-living crisis on this demographic.
On the flip side, the highest earning households witnessed a 4.8% annual rise in disposable income in August, reaching £790 per week.
In response to the ongoing financial crunch, Asda says it is taking strides to alleviate the financial strain on families.
The supermarket giant recently announced price cuts on 425 branded and own-label products, investing £23 million to reduce prices on popular products by an average of 11%, including essentials like bread, meat, and pasta.
This move follows a £13 million investment in July to slash prices on more than 200 own-label products by an average of 9%.
While the rise in disposable income is a welcome development, the persistent disparity in the financial experiences of UK households underscores the continued need for supportive measures, especially for the lowest earning families still navigating the throes of the cost-of-living crisis.
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