Families are warming up their wallets with more disposable income
Families continue to enjoy boost in spending power as Asda’s latest Income Tracker reveals that Brits were all fired up with an extra £18 a week to spend in September, compared to 2014
- The average household across the UK enjoyed a September surprise with weekly discretionary income reaching £192 a week, up £18 on September 2014
- Prices of essential items, like food and drink dropped by 2.3%, firing up appetites for a big night in
- A drop in the cost of gas helped heat up homes and beat the autumn chill
- All regions avoided feeling the heat on their bank balances, as the UK has seen 2 years of continued growth in spending power
As the cold, dark winter nights start to creep in, UK families will be warming up to the fact they can enjoy more of the things they want. Asda’s latest Income Tracker has revealed that the average household now has £192 a week of discretionary income, up by £18 a week (10.6%) on the same time last year.
What’s more, it’s not just the temperatures that are falling. A 2.3% drop in the price of food and drink over the past year means that those hibernating at home can stock their cupboards for those big nights in front of the TV watching X Factor or The Rugby World Cup, particularly as the UK’s inflation rate continues to hit negative numbers (-0.1%), with September marking the eight consecutive month of near zero inflation.
As icy lows loom for the coming months, there is an extra comfort blanket in the form of falling gas prices for those keeping an eye on the pennies, with a welcome pre-winter drop of 2.1% in September meaning consumers can feel more confident when heating up their homes.
The good news doesn’t stop there, however. For those Brits looking to visit families over Halloween and Bonfire night, falling fuel prices will help to make the journey more enjoyable, with September petrol prices dropping 3.7p per litre.
Meanwhile, families choosing to add to their summer styles for a last-ditch summer break, made the most of extended sales which led to bigger bargains, and with Bonfire Night nearing, sparks are also expected to fly amongst shoppers looking to stock up on clothing essentials to help them brave the colder months.
Taking a national view, it’s a positive picture across the board, with all regions across the UK seeing double-digit increase in household discretionary income over the last year, ranging from a £12 increase in Scotland, to a £24 increase seen in the Capital.
Households in Northern Ireland continued to make up for lost ground against the other regions, whilst the three most prosperous regions; London, the East and the South East, all moved further ahead of the country, with spending power rising by over £20 year-on-year:
- London experienced one of the strongest increases in income growth in the last quarter, supported by wage increases in the financial and business services
- The West Midlands have seen a sharp fall in unemployment rates, driven by a rise in automotive manufacturing and inward investment into the Birmingham and its surrounding areas
- Although Scotland has felt a slowdown in gross income growth, essential item inflation remains negative in the region, a driving force behind the easing pressure on household finances
- Northern Ireland has once again experienced the strongest year on year growth in discretionary income across all parts of the UK, as household spending rose by 15.1% in the year to Q3 2015
Chief Customer Officer Barry Williams , said: “Two years of solid growth on discretionary income shows real stability in the economic recovery. Across the UK the benefit will be being felt, granted in some areas more than others, but double digit growth can only be good news for those holding the purse strings. It’s interesting that people continue to spend differently however, carrying their savvy shopping habits from the financial crisis with them and reprioritising their spending on treats and activities with their families, making the most out of their new found spare income.”
Sam Alderson, Economist, Cebr, said: “The further falls in gas and fuel prices in September provided more good news to households in September. With inflationary pressure remaining muted, an interest rate rise looks likely to be the next challenge facing households. This is now expected to come in mid-2016, as a more turbulent global economy means rates could stay lower for longer.”