A big financial divide is opening up among UK shoppers, according to a new report by Asda.
Its latest Income Tracker reveals that despite average household disposable reaching a record high, the majority of households have seen their disposable cash fall in the new year.
Asda found more than 60% of UK households in its survey saw their disposable incomes fall going into 2025. Income growth lagged behind annual inflation – despite it slowing to 2.5% in December.
The 60%-plus of households in that camp also did not benefit from the strong pay growth in the current job market in the same way as others.
The lowest-earning families, which make up 20% of all UK households, faced a shortfall of £70 per week in December with their take home pay not enough to cover bills and essentials.
Asda said while the upcoming increase in the national living wage may provide some relief for these households, it was unlikely to fully offset this ongoing financial gap.
However, the average UK household had £251 per week remaining after covering bills and essential expenses in December — an increase of 12.1% compared with the previous year.
The figure represents the highest disposable income figure recorded by the tracker, surpassing the pre-cost of living crisis peak of £247 per week in March 2021.
Asda said the improvements were largely driven by strong wage growth and slowdown in inflation.
Sam Miley, managing economist and forecasting lead at Cebr, which complied the figures, said: “The Income Tracker reached a new high in December, capping off a year of solid growth in spending power. Looking ahead, we expect further improvements to take place in 2025, driven by continued growth in real earnings.
“This should help to support the wider economy, by encouraging consumption. Despite these positive developments, it should still be noted that spending power is down on pre-cost of living crisis levels when considering values in real terms.”
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