The financial strain on UK households has slightly reduced, according to the latest data.
- Asda reports a 4.5% year-on-year increase in disposable income, the strongest growth since 2021.
- July saw a rise in the average household disposable income to £218 per week.
- A decrease in inflation, down to 6.8%, contributed to this financial improvement.
- Despite gains, disposable income remains lower than pre-crisis levels, with significant variations among age groups.
The latest report from a prominent supermarket outlines a subtle easing of the financial pressures that have been burdening UK households. The findings reveal a 4.5% rise in disposable income compared to the same period last year, marking the most vigorous annual growth rate observed since September 2021.
The data from July indicates an increase in disposable income by £9.48 weekly in comparison to last year. Households found their average disposable income reaching £218 per week, an uptick from June where it stood at £210. This increment is a reflection of the easing inflationary pressures.
Inflation saw a reduction to 6.8% in July from the 7.9% recorded the month prior. This diminishing inflation rate owes much to the decline in energy prices as well as reduced costs for food and non-alcoholic beverages, which have mitigated some financial strains on households.
Nevertheless, this improvement doesn’t fully offset the loss endured over the recent cost-of-living crisis. Average household disposable income is still trailing behind pre-crisis levels, diminished by £25.99 weekly compared to July 2021.
There is a marked disparity among different demographic segments. Households with individuals aged 30 to 49 continue to feel significant financial pressure. Their expenditure on essentials such as food, housing, and utilities was 9.4% higher than the previous year, averaging £726 per week. This is notably £135 more than the typical household’s spending on necessities.
Conversely, older households, particularly those over 65, enjoyed a 7.8% increase in disposable income compared to a year ago. They appear to be less encumbered by the current economic conditions.
Efforts are underway to further alleviate financial burdens on households, as evidenced by recent price reductions on essential products. Additionally, meal programs aiding children reflect a commitment to addressing economic disparities.
The financial landscape for UK households shows signs of improvement, though disparities and challenges persist.
