The latest findings from Asda’s Income Tracker show that the average household in every UK region had more to spend in the first quarter of 2025 compared to the same period last year.
Households were £25 better off on average in the months up to March than in 2024, with an average disposable income of £257 per week after paying bills and spending on essentials.
London again enjoyed the highest disposable income after bills, averaging £334 per week, with the capital recording a £27 year-on-year improvement in the months up to March. However, it is no longer the only region surpassing its pre-crisis peak. The East Midlands, Scotland, and the North West have all seen their spending power exceed pre-pandemic levels.
The improvements seen across regions are due to lower inflation compared to the same period last year. This has helped slow the growth of essential spending to 3.5% in the first quarter of 2025, down from 4.7% in the same period last year.
Although households had more to spend as a result of inflation easing, annual gross income growth did slow across nearly all UK regions in the three months ending in March, reflecting the impact of a cooling job market.
The Asda tracker shows that earnings growth slowed to 5.6%, down slightly from 5.7% during the same period last year, with the North East, Wales, and London experiencing the largest year-on-year declines in gross income growth.
However, Cebr, who compile the tracker, projects that the spending power of households may come under pressure in the coming months, due to the cooling job market, higher utility bills and cuts to welfare spending.
Charlie Cornes, Senior Economist at Cebr, commented: “The Income Tracker grew in the first quarter of the year, though at a slower pace than the previous quarter. In the months ahead, spending power may come under pressure due to a range of policy changes.
“Higher utility bills, cuts to welfare spending, and rising employer costs are all likely to impact consumers. However, these impacts are expected to be partially offset by continued income growth, as wages are projected to rise faster than headline inflation for the remainder of the year.”
