UK households now have £25 more to spend each week compared to the same period last year, with disposable income averaging £257 per week after bills and essentials in Q1 2025, according to Asda’s latest Income Tracker.
The improvement follows a decline in inflation, which dropped to 2.6% in March, largely due to falling fuel prices.
The supermarket‘s latest tracker shows that all UK regions saw an improvement in disposable income, with London continuing to have the highest disposable income at £334 per week, up £27 from the previous year.
The East Midlands, Scotland, and the North West have also surpassed their pre-pandemic income levels, indicating a broader regional recovery.
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Despite these improvements, Asda said income growth slowed across most regions.
Earnings growth in the first quarter of 2025 was 5.6%, down slightly from 5.7% in the same period last year. The North East, Wales, and London saw the largest declines in income growth.
Cebr, who compile the tracker, project that spending power of households may come under pressure in the coming months, due to the cooling job market, higher utility bills, and cuts to welfare spending.
Cebr senior economist Charlie Cornes said: “Higher utility bills, cuts to welfare spending, and rising employer costs are all likely to impact consumers. However, these impacts are expected to be partially offset by continued income growth, as wages are projected to rise faster than headline inflation for the remainder of the year.”
In response to rising costs, Asda has continued to reduce prices on thousands of products as part of its Rollback initiative, triggering a price war among the UK’s major grocers.
Since January, nearly 10,000 of its products have been reduced in price.
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