Thursday, January 20, 2022

Disposable income up despite rising cost of living

Disposable household income for UK families rose by £3 in February compared with the same month last year, meaning that this has not fallen year-on-year since March 2012, according to new figures released today.

On average, UK families had £155 a week of discretionary income last month, up on last year though remaining £4 lower than February 2011 as unemployment declined, with 590,000 more people in work over the last 12 months.

However, household budgets remain pressurised by rising energy costs as the price of gas rose 7.2 per cent year-on-year while weak wage growth is also causing concern.

Charles Davis, Head of Macroeconomics at CEBR, said:“It is encouraging that discretionary incomes have seen year-on-year increases now for almost a full 12 months, as job creation helps to boost incomes.

“However the outlook for household finances remains fragile.

“Wage growth is likely to stay low given the weak economic environment while inflation is expected to remain elevated, pushed up by the cost of energy inputs and the effect of a weaker pound.”

Last week, Asda‘s Mumdex report revealed that British mothers were most concerned about the rising cost of living and called on the Chancellor to reduce prices of everyday basics and scrap proposed fuel duty increases.

Ahead of the Budget announcement yesterday afternoon, A4818 promising to reduce the price of everyday items during “times of austerity”.

Delivering his Budget yesterday, George Osborne did scrap the fuel duty rise and also offered families with young children respite by introducing a tax-free childcare support scheme.

Commenting on today‘s findings, Asda President and CEO Andy Clarke said: “While it‘s encouraging to see another modest improvement in monthly spending power, there‘s no doubt that families up and down the country are continuing to feel the pinch.

“Our customers are attempting to make every penny go that extra mile. One mum told me last week, for instance, that she is putting her children to bed at 7p.m. to save on the cost of heating and half of those surveyed for our recent Mumdex report admit to only part filling up their car to save money.

“What we are hearing from our mums is that they need help with the cost of the basics – like heating, fuel and food.

“So while we are pleased that the planned rise in fuel duty in September no longer stands, we‘re continuing to work hard to keep down the price of these essentials, week in, week out.”


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