Posted: Mon 23rd Sep 2024

UK households see 12% rise in disposable income in August

News and Info from Deeside, Flintshire, North Wales

UK households have weathered the worst of the cost-of-living crisis, with disposable income continuing to rise, according to Asda’s latest Income Tracker.

The report highlights that disposable income increased by 12% in August compared to the same time last year. This marks the fifth consecutive month of double-digit growth in household spending power.

After accounting for taxes and essential expenses, the average UK household had £247 in disposable income per week in August.

This figure surpasses the pre-cost-of-living crisis peak of £246 per week recorded in March 2021.

The figures signal a recovery for many UK families, although the broader inflation rate remains unchanged since July.

One significant factor behind this improvement is the easing of food and drink inflation, which slowed to 1.3%.

With essential grocery prices beginning to drop, households are experiencing a much-needed boost in spending power.

Overall inflation has also dropped by 5% since August 2022, providing some relief as the holiday season approaches.

However, despite the positive outlook for many, the lowest-income households continue to struggle.

Asda’s Income Tracker reveals that for these families, the increase in disposable income is slower, with many still facing an average weekly shortfall of £66.

This means that even with the broader improvements in the economy, some households are still unable to cover essential costs, including bills and groceries.

Pushpin Singh, Senior Economist at the Centre for Economics and Business Research (Cebr), commented on the findings: “Despite the recent slowdown in earnings growth, annual wage growth continues to outpace consumer price growth. With inflation now 5% lower than a year ago, we expect spending power to rise further in the coming months. However, as wage growth slows and inflation remains above the 2% target, the pace of improvement may ease.”

In response to the ongoing challenges, Asda has introduced several initiatives to support its customers, including the Cashpot for Schools campaign. Launched at the start of September, the initiative has already raised over £2 million for UK primary schools

. The programme donates 0.5% of the value of customer purchases to a primary school of their choice when they shop using Asda Rewards.

 

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