The average UK household was better off in May than at any time in the past eight years as disposable cash reached its highest point since 2008, accor…
The average UK household was better off in May than at any time in the past eight years as disposable cash reached its highest point since 2008, according to Asda's monthly income tracker.
A drop in unemployment and the cost of essential items meant that the average UK home had £201 a week of discretionary income throughout May, £13 more than in May 2015, the supermarket giant's report found.
Lower transport costs and a rise in wages following April’s National Living Wage revision (now £7.20 for over-25s) also helped boost the amount of cash left over after deducting essential living costs such as groceries, mortgage, utilities, and transport.
The report claims that food and drink prices fell by 0.4 per cent in May on the previous month (2.8 per cent on this time last year) while the cost of clothing and footwear dropped 0.2 per cent. Prices at the petrol pump were lower too with vehicle fuels down 6.8 per cent on this time last year.
The eight-year high in disposable income was “very encouraging and demonstrates continued consumer confidence”, an Asda spokesperson said.
They added that although Britons were much better off and continued to gain spending confidence, it was difficult to envisage a long term picture because it was impossible to predict how the outcome of the EU Referendum would affect spending.
How they worked it out
Asda's tracker calculates that the average household brings in £750 a week, £118 of which goes straight to the tax man for National Insurance and income tax, leaving a net income of £632 a week.
Take away £431 for essential living costs like food, clothing, housing, bills etc, and that leaves the average family with £201 a week to spend how they like.
Sam Alderson, an economist at the Centre for Economics and Business Research, said: “May marks the fastest annual growth in 2016.
"[It] will likely provide some much needed security to households facing the uncertain outcome to the UK’s referendum on membership of the European Union.”
By James Francis