In July, UK households experienced a relief in financial pressure due to increased disposable income.
- Asda’s Income Tracker highlighted a 4.5% year-on-year rise in disposable incomes, marking significant growth.
- Average weekly disposable income increased by £9.48, reaching the highest level since March 2022.
- Inflation eased to 6.8% in July, largely due to lower energy and food costs.
- Despite improvements, disposable incomes are still below pre-crisis levels, with some age groups more impacted.
In July, financial relief was observed among UK households as disposable incomes grew by 4.5% year-on-year, according to Asda’s latest Income Tracker. This rise signifies the strongest annual growth rate since September 2021, offering a positive sign amidst recent economic challenges. Households experienced an increase in the amount they had to spend after taxes and essential bills, with an average weekly rise of £9.48 compared to the previous year.
Disposable income reached an average of £218 per week, up from June’s £210, marking the highest value recorded since March 2022. The improvement in spending power for households is mainly attributed to a decrease in inflation to 6.8% in July from 7.9% in June. This reduction is primarily due to declining energy prices and lower costs for food and non-alcoholic beverages, contributing significantly to the recent economic ease.
Despite these gains, it’s crucial to note that family disposable income still remains below pre-cost-of-living crisis levels. In monetary terms, the average household has £25.99 less per week compared to the figures from July 2021. There are disparities among different age groups, with those aged 30-49 finding their essential spending on food, housing, and utilities 9.4% higher than a year ago.
Households in this age bracket spent an average of £726 weekly on essentials in July, which is £135 more than the overall average. Conversely, older households aged 65 and above saw a 7.8% increase in their average disposable incomes over the same period, indicating a varied impact within different demographics.
Overall, while there are positive trends in the easing of financial burdens, disparities among different age groups highlight ongoing challenges.
