DISPOSABLE INCOME FALLS AS THE COST OF LIVING CONTINUES TO OUTPACE HOUSEHOLD INCOME
- The average UK household had £160 a week of disposable income in July 2013, down £1 a week from the same month last year and £5 a week from its peak in February 2010
- Factors including weak wage growth and the ongoing effects of the cap on working age benefits have slowed net income growth – down 0.4 percentage points this month, to 2.2%
- Energy bills continue to burn a hole in household budgets – rising over the past year by 8.2%, the fastest annual increase in home energy since August 2012
- Good news though for home owners as the cost of mortgage interest payments fell to 2.7% – the lowest since July last year
The latest Asda Income Tracker reveals that family spending power fell by £1 a week year-on-year in July 2013, as the cost of living continues to outstrip household income.
According to the latest figures, released today (Monday 19th August), the average UK family had £160 of discretionary income available to them in July 2013, unchanged from last month and well below its peak of £165, last seen in February 2010.
Slow wage growth and the 1% cap on working age benefits were again key factors behind this year-on-year decline, with average pay excluding bonuses up just 1.1% in the three months to June. The cost of essential items went up almost three times more (2.9%) over the same period than average pay, which was only marginally better than the 0.8% growth – an all time low – seen in the three months to March.
In fact, had it not been for the rise in the income tax-free allowance in April – from £8,105 to £9,440 – household disposable income would have fallen even further, by an additional £5 a week.
Despite a marginal fall in the inflation rate of essential items to 2.9%, the cost of living continued to rise faster than net incomes (2.2%), adding to the squeeze on family budgets. Over the past year, utility costs have risen by 8.2% – the fastest annual increase in home energy costs since August 2012.
For the full report, please visit Asda website