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Disposable income drops in most households: Asda

Disposable income drops in most households: Asda
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The vast majority of UK households (80 per cent) were notably worse off in May, compared to the same period last year, as rising living costs continue to outstrip wage growth.

According to the latest Asda Income Tracker, the decrease in disposable income has been particularly stark for low-earning families, with 40 per cent of UK households falling into negative income territory in May – implying their take home pay does not cover spending on bills and essentials. The average shortfall for these households was £42.50 per week in May.


In contrast, high-income households enjoyed a 2.1 per cent rise in disposable income in May year-on-year to an average of £754 per week. This is the second successive month of disposable income growth for these households, driven by strong increases in their gross income.

The tracker showed that family disposable income as a whole rose by £1.85 per week in May to an average of £207 per week, a 0.9 per cent increase compared to the same period last year.

However, even with this increase family finances remain weak, as May’s figure of £207 per week was the second lowest since October 2022. The strain on family disposable incomes is the result of elevated and persistent inflation in essential categories such as food and housing.

It comes as Asda announced that it has frozen the prices of over 500 branded and own-branded products. The price lock, which runs until the end of August, includes cupboard essentials such as cereals, pasta and tea, as well as summer favourites such as salads, burgers and ice cream.

We’re always looking at ways we can support our customers and communities throughout the year, which is why we’re locking the prices of hundreds of products until the end of August," Kris Comerford, Asda’s Chief Commercial Officer, said at the time.

“We know that household budgets are tight at the moment, so we want to be able to offer the best value and give customers the confidence they can shop the products they love throughout summer.”

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