According to the last one Income Tracker Published by Asda, all UK households saw their purchasing power fall in April for the month, as inflation soared to 3,5%, its highest level in 15 months. The rise was largely driven by rising energy costs following Ofgem's upward revision of the price cap.
Further weighing on the situation were the rises in water bills – the highest since 1988 – and the cost of holidays abroad. Despite an increase of £11,53 per week compared to April 2024, the increase in costs cancelled out the gain: real disposable income fell by £8,35 on a monthly basis, settling at £249 per week.
The situation is even more critical for low-income families, who have seen their disposable income fall by 10,6% compared to the previous year, with a weekly deficit of 75 pounds, making it difficult to meet essential expenses. Some relief could come from the increase in National Living Wage introduced last month.
“The rise in inflation in April hit key sectors like energy and transport hard, adding to the pressure on households,” said Sam Miley, Head of Forecasting at Cebr. “However, we expect the coming months to improve, with wage growth expected to outpace inflation.”
Meanwhile, Asda continues to offer value to families: to celebrate its 60th anniversary, it has reduced the price of its ‘Kids Eat for £1’ meal to just 60p throughout May, allowing a family of four children to have lunch for less than £2,50.
