Latest figures from Asda’s Income Tracker suggest that financial pressures on some UK families eased again in April, with disposable income for the average household reaching its highest level since September 2021.
The amount average households were left with last month, after spending on bills and essentials, was £239 per week – £32.52 per week higher than April 2023. The improved financial outlook saw the tracker reach its highest level in well over two years, with household disposable income now only 2.7% below its pre-crisis peak of £346 in March 2021.
A key driver behind the improvement in household spending power was a third consecutive month of easing inflation, which now stands at 2.3% – the lowest rate in more than two years. Additionally, lower-income households benefited from the recent uplift in the National Living Wage, which took effect last month.
Asda noted that although all households saw an increase in spending power in April compared to the previous year, many family budgets remain under pressure in real terms.
The lowest-income households, comprising 20% of all UK households, had negative disposable income last month. This means their take-home pay was insufficient to cover bills and essentials, with a monthly shortfall of £69.
Sam Miley, Managing Economist and Forecasting Lead at Cebr, who produces the data on behalf of Asda, commented: “The Income Tracker continues to improve, with discretionary income increasing to £239 per week. This improvement was driven by several factors, including still resilient earnings growth, the reduction in the Ofgem price cap, the uplift in the National Living Wage, and further cuts to National Insurance contribution rates.
“Cebr anticipates spending power to see further improvements in 2024, bolstered by the economic growth momentum that has pulled the UK out of the technical recession experienced in H2 2023.”
