Lowest earning households see disposable income grow for the first time in over two years

• Asda’s Income Tracker was £18.56 a week higher in February 2024 than a year before

• The improvement was driven by a continued increase in income growth

• The Income Tracker has now recorded annual growth for eleven consecutive months

The latest figures from Asda’s Income Tracker reveal that the lowest earning households saw their disposable income grow for the first time since August 2021.

The disposable income for these households grew by 4.9% in February 2024, largely driven by a continued increase in gross income and a sharp slowdown in core inflation.

Whilst these households saw some green shoots of recovery, the figures show that their discretionary income is still negative at -£68, meaning that their take home pay is not enough to cover spending on bills and essentials.

In contrast, discretionary income was £18.56 a week higher in February 2024 than a year before for the average UK household at £231 - marking eleventh consecutive months of growth.

With the exception of October 2023, this represents the strongest annual growth for the average UK household since August 2021.

Upcoming policy changes, including the reduction to National Insurance Contribution rates, uplifts to pension payments, social and the National Living Wage are expected to further boost household spending power in the coming months.

Despite these positive trends, discretionary income still remains 6.2% below its pre-crisis peak. However, the sustained increase in the Income Tracker since April 2023 signals a steady recovery.

Sam Miley, Managing Economist and Forecasting Lead at Cebr who produce the Income Tracker on behalf of Asda, said: “The Income Tracker has been improving for almost a year now, with households continuing to recover from the depths of the cost-of-living crisis.

“A particularly sharp uptick is expected to take place from April, when inflation will ease significantly off the back of lower household energy bills. This will help to support spending power and consumer activity.”

Asda continues to support families, communities and its colleagues by launching new propositions regularly.

The supermarket recently confirmed that its proposal to increase hourly pay for all store-based colleagues from £11.11 to £12.04 has been accepted following a ballot by Usdaw members.

This represents an 8.4% increase in pay and a total investment of £150m in colleague pay this year, which makes Asda the highest-paying traditional supermarket.

Asda also announce that its hugely popular ‘Kids Eat for £1’ café meal deals will continue to run in over 205 Asda Café’s all year round.

The supermarket launched the offer for kids under 16 in June 2022 and has now served over three million meals in cafes nationwide. The initiative stands apart from the other retailers who offer similar deals, as the meal comes with no hidden extras such as a minimum adult spend.

You can view the Income Tracker here.