
Over 60% of UK households saw their disposable incomes fall going into the new year, according to Asda, despite its recent income tracker hitting a record high and “capping off a year of solid growth in spending power”.
Income growth trailed behind annual inflation, which stood at 2.5% in December, according to the Consumer Prices Index (CPI).
Additionally, lower income households did not benefit from the strong pay growth in the current job market in comparison with higher income families, the grocery giant reported.
The lowest-earning families, comprising 20% of all UK households, faced a deficit of £70 a week in December, with their take home pay still not covering bills and essentials.
The average UK household had £251 left after paying bills and essential expenses last month, up 12.1% compared to the prior year.
The supermarket, which recently restarted its search for a CEO, said the figure was the highest disposable income figure recorded by its tracker, exceeding the pre-cost-of-living crisis peak of £247 a week in March 2021, which it attributed to strong wage growth as well as a slowdown in inflation.
However, CEBR managing economist and forecast lead Sam Miley said that “spending power is down on pre-cost-of-living crisis levels when considering values in real terms.”
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Miley added: “The income tracker reached a new high in December, capping off a year of solid growth in spending power.
“Looking ahead, we expect further improvements to take place in 2025, driven by continued growth in real earnings.”
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