The latest research from Asda’s Income Tracker revealed that nearly six in ten households feel their weekly pay does not stretch as far as it did last year.

According to the data, the lowest 20% of earners were affected the most, seeing their spending power fall by 5% year-over-year (Yoy), which left them with a £73 shortfall and unable to cover essential bills and everyday spending.

The Asda Income Tracker’s growth slowed last month, which left the average UK household with £256 a week in discretionary income.

Additionally, annual inflation increased to 3.4%, which marks a slowdown in the recent disinflationary trends. Food and non-alcoholic beverage inflation rose to 4.5%, which was driven by an increase in prices for bread and cereals.

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The spending power for households earning around £25,000 a year has declined by 7.1% compared with the same period in the last year.

Moving forward, consumers have a pessimistic outlook for households, which reflects weaker earnings growth alongside a pause in disinflation.

Sam Miley, head of forecasting and thought leadership at Cebr, said: “Overall, 2025 has been a mixed year for the Income Tracker. While Q4 has shown signs of recovery for household purchasing power, this has largely been down to a slowdown in underlying price pressures, rather than an acceleration in earnings growth.

“Looking ahead, despite an uptick in inflation in December, Cebr expects this trend to continue over the first half of 2026. Easing price pressures and weakening earnings growth are competing influences on the Income Tracker, creating substantial uncertainty for future performance.”