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Disposable incomes for the average UK household has returned to highs not seen since prior to the cost-of-living crisis, according to Asda’s latest income tracker.
Figures from showed that despite a 14% year-on-year increase in disposable income for the average household during the second quarter of 2024, consumption was down by 0.3% during the same timeframe.
It means households are prioritising saving over spending, putting away an average of £122 a week on the second quarter of 2024, which represented a 12.3% year-on-year increase.
The uptick in savings comes as disposable income grew to £245 per week in July, the highest figure since March 2021 and an 11.7% year-on-year rise.
While all age groups are expected to witness further improvements in spending power as result of income growth continuing to outpace inflation, some groups were more insulated from volatility than others, according to the supermarket’s findings.
Households above 65 years of age recorded the strongest disposable growth in July and their disposable income now sits above the UK average. Unlike working age households, older households are less likely to be exposed to the impact the volatile job market has on disposable income, and benefit from their state pensions being locked.
Sam Miley, managing economist and forecasting lead at Cebr, which independently compiles the tracker for Asda, said: “While household spending power has continued to grow, consumption has reduced within the same timeframe.
“This reflects the trend of households spending less and instead diverting more of their disposable income towards savings. Earnings growth continues to outpace inflation, so further improvements in discretionary income are expected across all age groups and other demographics.”
Morning update
It’s a quiet start to the week on the markets as the UK gets ready for the August bank holiday weekend.
The FTSE 100 opened the new week down 0.3% to 8,290.90pts.
Early fmcg risers include McBride, up 1.6% to 128.5p, THG, up 1.2% to 62.2p, and C&C Group, up 1% to 155p.
Virgin Wines leads the fallers, tumbling 5.6% to 42p, while Glanbia is down 5.3% to €16.05 and Nichols is down 2.8% to 1,132.5p.
This week in the City
There is little scheduled this week as the summer holidays reach their heights.
The latest monthly Nielsen grocery sales figures are out on Wednesday morning and the monthly GFK consumer confidence index is out first thing on Friday.
Elsewhere, Waitrose is holding an event for journalists and analysts at its revamped John Barnes store on Finchley Road tomorrow evening, ahead of the official reopening on Wednesday.
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