The average family had £15 a week less in September this year than they had in the same month in 2010, according to data released today.
In the third consecutive month of record breaking decline, disposable income had dropped 8.4 per cent compared to the same period last year, leaving the average consumer with £163 for the month.
The Asda Income Tracker found that families were struggling to find the funds for utilities and fuel as rising inflation continued to affect consumers.
While most places in the UK are witnessing some form of decline, the results reveal a north/south divide, as discretionary spend in London was £276 per week in Q3, compared to the UK average.
Northern Ireland continued to suffer from the lowest household spending power, with the Income Tracker figure for the region dropping for the third consecutive quarter to just £76 per week in Q3, down from £94 for the same period the year before.
Andy Clarke, Asda President and CEO, acknowledged the regional differences, saying: “For 18 consecutive months we’ve seen a decline in family spending power.
“While disposable income was down everywhere in September, there is clearly a growing divide between the north and the south. ? ”Spiralling petrol costs are piling on extra pressure on households across the north of England and Northern Ireland where families are much more reliant on the car to get about.”
Households across the country are feeling the pressure as annual inflation on the consumer price index grew again to 5.2 per cent in September, an increase of 0.7 on the previous month.
As we head into the winter months, it is clear that electricity and gas prices already drain money from consumers, with prices compared to 2010 up 12.9 per cent and 22.3 per cent respectively.
Disposable income has been further hit by the growing expense of transport, as the AA reveals that the cost of getting around went up 17.7 per cent year-on-year last month.
Clarke commented: “As we head into winter and the nights draw in we know that the cost of food, transport and utilities go up.
“It’s our job to continue to cut costs across all our operations so that we can hold down the price of food and fuel and help hard-pressed families make ends meets as prices are rising everywhere else.”
Unemployment growth is also detrimentally affecting spending power, as the rate of unemployment for 16-24-year-olds rose to 21.3 per cent over the quarter to August, up 1.6 per cent on the three months before and the highest rate since comparable records began in 1992.
Charles Davis, Managing Economist for Cebr, which helped compile the tracker data with Asda, suggested that economic pressure is coming from all sides.
“Family spending power continues to be under significant pressure from the three-pronged threat of fragile wage growth, rising unemployment levels, and soaring consumer price inflation,” he said.
“As utility price increases continue to feed through into erosions in family budgets, a tough couple of months lie ahead.
“However some pressure could ease from the start of 2012, as inflation is expected to fall back.”