The latest figures from Asda’s Income Tracker reveal that the average household disposable income is the highest it has been in almost two years.
The average UK household saw their disposable income rise by 6.1% year-on-year (YoY) to £230 ($291.41) per week in January 2024, marking the strongest figures since March 2022 and the tenth consecutive month of annual growth.
Factors driving the increase
Despite elevated living costs and tighter policy conditions leading to a technical recession in the second half of last year, households are now beginning to see some improvements, with the early outlook for 2024 showing signs of recovery.
Factors such as weaker food price inflation and the recent change to National Insurance contribution rates have improved the take-home pay for working households in the country.
Income distribution across households
However, it is not an equal picture of improvement across UK households. Middle-income households are witnessing the most robust growth as a result of these improvements. Their income grew by 15.6% when compared to the same period a year earlier, to £254 a week.
In stark contrast, the lowest-earning households are still the only group witnessing a fall to negative discretionary income.
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By GlobalDataTheir income decreased by -0.5% YoY with a -£69 a week shortfall. This means that their take-home pay is not enough to cover spending on bills and essentials.
Expert opinion and economic outlook
Sam Miley, managing economist and forecasting lead at Cebr, which produces the Income Tracker on behalf of Asda, said:
“This improvement was driven by a number of factors, including continued earnings growth, weaker food price inflation, and the recent cut to National Insurance contribution rates. Cebr expects spending power to continue growing in 2024, supported by a generally more positive economic outlook.”
Asda’s contribution to the community
The retailer recently announced plans to bring its low grocery and fuel prices to more communities across the UK by stepping up its convenience proposition.
It will open 110 Asda Express convenience stores this month, a record for a single month, – putting it on track to reach 1,000 UK Asda Stores in total for the first time.
Asda also recently became the first supermarket to price match Aldi and Lidl on 287 comparable grocery products.
