Financial Relief for UK Households: Asda’s Income Tracker Reveals
In recent times, many UK households have been grappling with financial pressures that seemed unrelenting. However, there’s a glimmer of hope on the horizon. The latest data released by Asda’s Income Tracker paints a more optimistic picture. It indicates that the burden on families has started to ease, with the average household disposable income hitting a 17-month high.
A Silver Lining
During the month of August, the amount available for households to spend on themselves after settling taxes and essential bills increased by £14.27 per week compared to the same period in the previous year. This surge in disposable income brought the weekly average to £224, the highest it has been since March 2022.
Drivers of Improvement
This impressive upswing in disposable income can be attributed to several key factors. Notably, robust gross wage growth played a significant role, coupled with the unexpected deceleration of inflation for the third consecutive month. In August, annual inflation dipped to 6.7%. Of particular note, food and non-alcoholic beverages were the primary contributors to this welcome slowdown.
Not All Smooth Sailing
It’s important to note that these improvements are not universally experienced. In August, disposable income declined for 60% of UK households compared to the same period the previous year. This means that for the majority of families, disposable income remains below pre-cost-of-living crisis levels.
The Numbers Speak
When we compare August 2022 to the same month in 2021, the data reveals a decline in disposable income by £19.48 per week for the average household. This underscores the challenges that many continue to face.
The Income Tracker also highlights a stark income disparity. The lowest-earning households are still bearing the brunt of the cost-of-living crisis, facing a deficit of £72 in disposable income per week. This shortfall means that their take-home pay is insufficient to cover the costs of bills and essentials.
In stark contrast, the highest-earning households are experiencing a different trajectory. Disposable income for this demographic saw a robust annual growth rate of 4.8% in August, reaching an impressive £790 per week.
Throughout these trying times, Asda has remained dedicated to supporting families. The supermarket has been vigilant in keeping prices in check, a commitment that extends beyond rhetoric. Recently, Asda announced substantial price cuts on 425 branded and own-label products.
An Investment in Relief
As part of this initiative, Asda is investing £23 million to reduce prices on some of the most frequently purchased products by customers. On average, these price reductions amount to 11% and encompass essentials like bread, meat, and pasta. This follows a £13 million investment made in July, which saw prices slashed on more than 200 own-label products, with an average reduction of 9%.
In a bid to further assist customers, Asda has rolled out its popular Rewards app, which has garnered over five million users. This innovative app offers customers the opportunity to earn pounds rather than points when they make select purchases or complete specific missions. To date, customers have collectively earned over £200 million in Cashpots, a sum they can tap into to alleviate the cost of their grocery bills.
As the financial landscape gradually shifts, Asda’s Income Tracker provides valuable insights into the changing dynamics of disposable income in UK households. While there are positive trends, it’s evident that the cost-of-living crisis continues to affect a substantial portion of the population. Asda’s ongoing commitment to price reductions and innovative solutions, like the Rewards app, demonstrates a dedication to supporting their customers during these challenging times.