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Disposable income continues to fall for majority of households

  • 80% of households saw their disposable income decrease in August compared to the same month last year
  • Average household disposable income fell by £32.32 a week in August - equivalent to £129.28 per month
  • One in five UK households had a negative disposable income of £60 in August
September 23, 2022 09:14am
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The majority of UK households are notably worse off compared to this time last year as spiralling living costs continues to outstrip wage growth, according to the latest
Asda Income Tracker.

Despite strong annual wage growth of 5.5% in the three months to the end of July¹, 80% of UK households were worse off in real terms due to an 11.8% increase in spending on essentials such as rent, mortgage payments, fuel, groceries, and transport costs.

The only households to buck this trend were those in the highest income quintile, who saw their disposable incomes increase by 0.3% year-on-year in August, thanks to annual wage growth of 5.4%.

In contrast, low-earning households continue to be disproportionately affected by the cost-of-living crisis, with those in this category experiencing a 95% drop in discretionary income year-on-year in August due to negative wage growth and soaring living costs.

Consequently, these families – who account for 20% of UK households – had ‘negative disposable income’ in August, resulting in a shortfall of £60 per week between what they earned and what they needed to spend on essentials just to keep their households running.

Housing and utilities remained the most significant contributor to inflation in August increasing by 20.0% year-on-year. Energy prices remain key drivers, with gas prices up 95.7% annually and electricity prices up by 54.0%, reflecting the currently elevated Ofgem price cap and with the cap increasing again in October, it will mean bills will be almost double compared to 12 months ago.

* The Asda Income Tracker is a measure of ‘disposable income’, reflecting the amount remaining after the average UK household has had taxes subtracted from their income and bought essential items such as: groceries, electricity, gas, transport costs and mortgage interest payments or rent. The Income Tracker measures the amount left over to spend on discretionary purchases such as leisure and recreation goods and services.

¹ONS Average Weekly Earnings in Great Britain September 2022


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