Squeeze on household disposable incomes is much worse for families living in certain parts of the UK than others, shows the latest figures from Asda’s Income Tracker.
The decrease in disposable income has been particularly evident for low-earning families, with 40 per cent of UK households in negative income territory last month – meaning their take home pay did not cover spending on bills and essentials.
Families in Northern Ireland, the North East and West Midlands struggled the most during the second quarter, with average weekly disposable incomes of £95, £133 and £163 respectively – well below the UK average of £208 across the quarter to 30 June. In addition to these regions, other areas of the UK that also saw a decline in disposable income during the quarter were the South East (excluding London), East of England and Wales.
Those regions faring worse than others during the cost-of-living crisis tend to be characterised by a greater concentration of spending on consumption categories that have seen high inflation recently. They also have lower employment rates or a higher concentration of employment in low paid or low wage growth occupations than other parts of the UK.
In contrast, many families living in London are faring better with rising living costs and have seen disposable incomes rise by 5.8 per cent year-on-year to an average of £272 per week during the quarter.
A key factor behind this rise is the strong labour market and concentration of high paying jobs in the capital. While family disposable income as a whole across the UK rose by £5.74 a week in June to an average of £210 per week – a 2.8 per cent increase compared to the same period last year – rising living costs continue to outstrip wage growth for the majority of households outside of the capital.
Kris Comerford, Asda’s Chief Commercial Officer, said, “We know that families are continuing to feel the pinch financially – especially as they head into the summer holidays – and are looking for help to make their grocery budget stretch further. Whenever there is an opportunity to help them make their money go further by lowering prices we will continue to do so.”