UK Households have been warned they face a £264 financial gap in their expenses every month despite a considerable rise in their disposable income.
UK Households' Disposable Income Rises Amidst Essential Cost Challenges
Studies on disposable income conducted by supermarket behemoth Asda has discovered that despite an increase in disposable income worth £31 per week, many UK households are still £66 per week behind on their bill payments.
According to Asda's findings, disposable income surged by 15.1% in May all over the UK, a rise of £31 a week, meaning households currently have £239 each week to spare, or £956 a month of disposable income.
Yet, despite the positives, many unprivileged UK households remain £264 short of being able to meet their mortgage, energy bills and food costs each month.
To explain how it works, Asda stated that its Income Tracker calculates the amount of cash remaining to the average UK household after taxes were deducted from their income, and necessary items were bought including food, energy bills, transport, rent, or mortgage payments. The income tracker computes the amount left over to allocate for leisure and recreation.
Asda Warns Many UK Households Are £264 Short on Essential Bills
Asda has also warned that for the most economically disadvantaged households, people are still £264 short of paying their bills.
The report stated: “The latest figures from Asda’s Income Tracker reveals that disposable income for low-earning households hit a near three-year high in May, following a 12.6% increase year-on-year.
Despite this increase, budgets for these families remain under pressure in real terms, as their take home pay was still not enough to cover bills and essential spending, leaving them with an average weekly shortfall of £66.”
In response to this month’s Income Tracker, Pushpin Singh, Senior Economist at Cebr, remarked:
“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. Cebr anticipates spending power to see further improvements in 2024, bolstered by the relatively strong growth momentum seen in Q1 2024.”