The latest figures from Asda’s Income Tracker show that the financial burden facing many families eased last month as average household disposable income reached a 17-month high.
The amount households had to spend on themselves after paying taxes and essential bills in August was up by £14.27 a week compared to the same period a year earlier, taking average disposable income to the highest it has been since March 2022 at £224 per week.
The improvement in disposable income is primarily driven by strong gross wage growth and the unexpected slowdown of inflation for the third consecutive month. Annual inflation fell to 6.7% in August, with food and non-alcoholic beverages being the largest contributor to the slowdown.
However, these improvements are not felt equally, as disposable income fell for 60% of UK households in August compared to the same time last year – remaining below the levels experienced before the cost-of-living crisis.
Compared to August 2021, disposable income was down by £19.48 per week for the average household.
The tracker indicates that lowest earning households are still bearing the brunt of the cost-of-living crisis with a deficit of £72 in disposable income per week – meaning their take home pay is not enough to cover spending on bills and essentials.
In contrast, the highest earning households are enjoying further growth with disposable income for this demographic rising by 4.8% annually in August to £790 per week.
Asda continues to support families during the cost-of-living crisis by keeping prices in check and recently announced price cuts on 425 branded and own-label products.
The supermarket is investing £23m to lower prices on some of the most popular products bought by customers each week by an average of 11%, including bread, meat, and pasta. These reductions follow a £13m investment in July to cut prices on more than 200 own-label products by an average of 9%.
More than five million customers are now using Asda’s popular Rewards app which provides customers with the chance to earn pounds, rather than points, each time they purchase certain products or complete a milestone mission. Customers have earned over £200m in their Cashpots, which they can use to reduce their grocery bills.