UK Households Face £264 Financial Gap Despite Rise in Disposable Income

A recent study by Asda has revealed that UK households are facing a significant financial gap of £264 per month, despite a notable increase in their disposable income. The research highlights the struggles of many households in meeting their essential expenses, including mortgage payments, energy bills, and food costs.

Rise in Disposable Income

According to Asda’s Income Tracker, disposable income has surged by 15.1% in May, resulting in an additional £31 per week for households to spare. This increase brings the total disposable income to £239 per week, or £956 per month. However, despite this positive trend, many households are still struggling to make ends meet.

Households are facing a significant financial gap

The Income Tracker calculates the amount of cash remaining after taxes and necessary expenses, such as food, energy bills, transport, rent, or mortgage payments, are deducted from income. The remaining amount is then allocated for leisure and recreation.

Financial Pressures on Low-Earning Households

The report highlights that low-earning households are particularly affected, with a weekly shortfall of £66 in meeting their essential expenses. This means that these households are £264 short of paying their bills every month.

Pushpin Singh, Senior Economist at Cebr, commented on the findings, stating that the Income Tracker continues to improve, driven by factors such as elevated nominal earnings growth, easing inflation, and tax policy changes. Cebr anticipates spending power to see further improvements in 2024, bolstered by the relatively strong growth momentum seen in Q1 2024.

Asda’s Income Tracker reveals the financial struggles of UK households

The study serves as a reminder of the financial pressures faced by many UK households, despite the increase in disposable income. It is essential for households to reassess their budgets and prioritize their essential expenses to avoid falling into debt.

Conclusion

The financial gap faced by UK households is a pressing concern that requires attention. As the cost of living continues to rise, it is crucial for households to be mindful of their expenses and make adjustments to ensure they can meet their essential costs. By doing so, households can avoid falling into debt and improve their overall financial well-being.

Households must prioritize their essential expenses