Household disposable income fell by a record £44 a week in June, marking its eighth consecutive month of decline as the cost of living crisis intensifies.
The average household was £175.80 worse off in June this year than they were in the same month in 2021, according to Asda’s monthly income tracker, produced by the Centre for Economics and Business Research.
Disposable income, which is defined for the purposes of the tracker as the income households have left to spend after taxes and essential bills, fell to its lowest level in five years, with the average household left with £200 to spend.
The poorest households are hit the hardest by the rise in the cost of living because they spend a greater proportion of their income on essentials such as household utilities and groceries. The surge in inflation over the past year has been partly driven by the high global price of energy and fuel, which has pushed up food prices partly through the higher cost of storing and shipping goods at every stage in the supply chain.
A fifth of households have a shortfall of £60 every week between their earnings and what they need for essential spending, including rent or mortgage payments, utility bills and transport costs, according to the analysis.