UK households are prioritising saving over spending, despite disposable income levels reaching the highs seen prior to the cost-of-living crisis, according to fresh data from Asda.
The supermarket’s latest Income Tracker shows that despite a 14% increase in disposable income for the average household during the second quarter to a year earlier, consumption was down by 0.3% during the same timeframe.
Asda said this suggests that households are using spare cash to top up the savings depleted during the cost-of-living crisis.
The uptick in savings comes as disposable income grew to £245 per week in July, the highest figure since March 2021.
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In July, households above the age group of 65 recorded the strongest disposable growth.
CEBR managing economist and forecasting lead Sam Miley said: “While household spending power has continued to grow, consumption has reduced within the same timeframe.
“This reflects the trend of households spending less and instead diverting more of their disposable income towards savings. Earnings growth continues to outpace inflation, so further improvements in discretionary income are expected across all age groups and other demographics.”
