UK Households Face £264 Shortfall in Monthly Expenses

A recent study by supermarket giant Asda has revealed that UK households are facing a significant shortfall in their monthly expenses. Despite a boost in disposable income, many families are still struggling to pay their bills, including mortgage payments, energy bills, and food shops.

According to Asda’s Income Tracker, the average UK household has seen a 15.1% increase in disposable income, amounting to an extra £31 per week. However, this increase is not enough to cover the essential expenses of low-income households, leaving them with a weekly shortfall of £66.

Households are struggling to make ends meet

The Income Tracker measures the amount of money left over after taxes and essential items are paid for, such as food, energy bills, transport, and mortgage payments or rent. The report highlights that low-income households are still struggling to make ends meet, with a monthly shortfall of £264.

The Impact on Low-Income Households

The study reveals that despite the increase in disposable income, low-income households are still facing significant financial pressure. The report states that these households are still £264 short of being able to pay their bills each month.

Rising food prices are adding to the financial burden

Pushpin Singh, Senior Economist at Cebr, commented on the report, saying: “The Income Tracker continues to improve, with discretionary income increasing to £239 per week. This improvement continues to be driven by several factors, not least elevated nominal earnings growth, easing inflation, the uplift in the National Living Wage, and tax policy changes.”

A Glimmer of Hope

Despite the challenges faced by low-income households, the report suggests that there is a glimmer of hope on the horizon. Cebr anticipates that spending power will see further improvements in 2024, bolstered by the relatively strong growth momentum seen in Q1 2024.

Mortgage payments are a significant expense for many households

As the cost of living continues to rise, it is essential for households to budget carefully and make the most of their disposable income. By understanding the challenges faced by low-income households, we can work towards creating a more financially stable future for all.

‘The Income Tracker continues to improve, with discretionary income increasing to £239 per week.’ - Pushpin Singh, Senior Economist at Cebr