Disposable income shrinks to three year low.


Report shows that the average family has only £144 a week of disposable income. 

The latest Asda Income Tracker (AIT) showed that family spending power fell by £10 a week in March, which left the average UK family with £144 of weekly disposable income once all their bills and taxes had been paid.

Managing economist at Cebr, Charles Davis said: “Family budgets in 2012 are continuing to be squeezed by the three pressures of high unemployment, weak wage increases and stubbornly elevated inflation.

“While growth in the price of essentials is likely to fall back slowly this year, the current tough conditions in the UK labour market look set to prevail. Average earnings growth is expected to trail inflation over 2012, keeping pressure on household incomes. As such we are likely to see continuing declines on the Asda Income Tracker over the coming months, although at a slower pace than during 2011.”

The official measure of the rising cost of living the CPI (consumer price index) was up in February by 3.5%, whilst average earnings growth which remained at just 1.6%.  

The below inflation salary increases and tough conditions in the labour market mean unemployment is still having an impact despite slight year-on-year improvements in the headline rate. Balancing the two conflicting elements, family income growth is still very fragile, with the improving cost of basics overshadowed by the high number of workers becoming unemployed.

Despite some recent improvements in the cost of utilities and transport with a drop in wholesale prices and energy providers making cuts to bills in March, they are still two of the main factors putting pressure on discretionary spend. The cost of electricity and gas remains well above that of last year and are rising again by 8.1 and 16.1 respectively in March. Petrol and diesel prices by 4.2 and 4.7% respectively over the year, with prices at the pump hitting an all-time high during the month.


  • Date posted:
    02/05/2012
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