The latest figures from Asda’s Income Tracker reveal the financial pressures facing UK households eased slightly last month, with a 4.5% increase in disposable incomes year-on-year - marking the strongest annual growth rate since September 2021.
In July, the amount households had to spend on themselves after paying taxes and essential bills, was up by £9.48 a week compared to the same period a year earlier.
Compared to the previous month, disposable income picked up by £6.09 per week, taking the average disposable income to the highest it has been since March 2022 at £218 per week.
The improvement in household spending power was due to the easing of inflation down to 6.8% in July compared to 7.9% the previous month. This was predominantly due to lower energy prices, while lower food and non-alcoholic beverage prices also contributed to the monthly slowdown.
However, despite these recent improvements, family disposable income remains firmly below the levels experienced prior to the cost-of-living crisis - down by £25.99 per week for the average household compared to July 2021.
There are also notable differences between households, with those aged 30-49 feeling the pinch the most as their spending on essentials, such as food, housing costs and utility bills, was 9.4% higher in July compared to a year earlier. On average, these households spent £726 on essentials per week in July - £135 per week more than the average spend on essentials for all households.
In contrast, older households aged 65+ enjoyed a 7.8% increase in average disposable incomes in July compared to a year earlier. This reflects their stronger gross income growth following the recent uplift to the state pension and smaller rises in the cost of essentials.
Asda continues to support families during the cost-of-living crisis by keeping prices in check and launching new propositions to provide customers with more value each time they shop.
Asda won the Grocer 33 pricing award for the 26th consecutive year last month and recently announced it was cutting the prices of more than 200 own-label lines by an average of nine percent. The products include a host of fresh fruit and vegetables, frozen meat and fish products, cupboard staples and popular ready meals.
The supermarket has also extended its hugely popular kids eat for £1 cafes offer until the end of the year – it has served over two million meals to kids since it launched the initiative last June.