Low-earning households experienced a 95% drop in discretionary income year-on-year in August due to negative wage growth and soaring living costs, according to the latest Asda Income Tracker.
These families, which account for 20% of UK households, had “negative disposable income” in August, resulting in a shortfall of £60 per week between what they earned and what they needed to spend on essentials just to keep their households running.
This comes as 80% of UK households also reported they saw their income decrease in August compared to the same month last year.
As a result of the ongoing cost-of-living crisis continuing to outstrip wage growth, the majority of UK households said they are notably worse off compared to the same period last year.
This is despite strong annual wage growth of 5.5% in the three months to the end of July.
Average household disposable income fell by £32.32 a week in August, which is equivalent to £129.28 per month, the income tracker revealed.
The only households to profit from this trend were those in the highest income quintile, who saw their disposable incomes increase by 0.3% year-on-year in August, thanks to annual wage growth of 5.4%.
Housing and utilities remained the most significant contributor to inflation in August increasing by 20% year-on-year, the Big 4 grocer’s income tracker revealed.
Energy prices remain key drivers, with gas prices up 95.7% annually and electricity prices up by 54%, reflecting the price hike of Ofgem’s price cap, which is set to increase again in October.
