Financial burdens facing many families in the UK eased last month, as average household disposable income reached a 17-month high, according to the latest figures from Asda’s Income Tracker.
The supermarket found that the improvement in disposable income is primarily being driven by strong gross wage growth, and the unexpected slowdown of inflation for the third consecutive month.
The income tracker indicates that the lowest earning households being hit the hardest by the cost-of-living crisis – with a deficit of £72 in disposable income per week – meaning their take home pay is not enough to cover spending on bills and essentials.
In comparison, the highest earning households are enjoying further growth with disposable income for this demographic rising by 4.8% annually in August to £790 per week.
The amount households had to spend on themselves after paying taxes and essential bills in August was up by £14.27 a week compared to the same period a year earlier, taking average disposable income to the highest it has been since March 2022 (£224 per week).
It comes as annual inflation fell to 6.7% in August, with food and non-alcoholic beverages being the largest contributor to the slowdown.
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Asda has continued to support families during the cost-of-living crisis over the last year, such as cutting the price of more than 400 branded and own-label products.
The supermarket is also investing £23m to lower prices on some of the most popular products bought by customers each week by an average of 11%, including bread, meat and pasta.
These reductions follow a £13m investment in July to cut prices on more than 200 own-label products by an average of 9%.
