Household disposable income across the UK hit a 30-month high of £239 a week in April, and it is now just 2.7% below the pre-crisis peak of £246 in March 2021, according to figures in the latest Asda’s Income Tracker.
But whereas most regions enjoyed bumper weekly increases in what they have left over after all essential bills were paid, in Northern Ireland the extra from last month was just £6.
Families in the north now have £118 a week left over (it was £112 in March).
That is the lowest in the UK and is a £202 discrepancy when compared to the strongest value witnessed in London £320).
The improved financial outlook saw the tracker reach its highest level in well over two years, with household disposable income now only 2.7% below its pre-crisis peak of £346 in March 2021.
A key driver behind the improvement in household spending power was a third consecutive month of significant deflation with annual inflation now standing at 2.3% - the lowest rate of inflation in more than two years.
Lower energy prices were a key component in driving the marked slowdown of inflation in April, with deceleration in food and non-alcoholic beverages also contributing.
Additionally, lower-income households benefited from the recent uplift in the National Living Wage which took effect last month.
Although all households saw an increase in spending power in April compared to the previous year, many family budgets remain under pressure in real terms.
The lowest income households, comprising of 20% of all UK households, had negative disposable income last month. This means their take-home pay was insufficient to cover bills and essentials, with a monthly shortfall of £69.
Sam Miley, managing economist and forecasting lead at Cebr, which produces the Income Tracker on behalf of Asda, said: “The index continues to improve, with discretionary income increasing to £239 a week, driven by several factors including still resilient earnings growth, the reduction in the Ofgem price cap, the uplift in the National Living Wage, and further cuts to National Insurance contribution rates.
“Cebr anticipates spending power to see further improvements in 2024, bolstered by the economic growth momentum that has pulled the UK out of the technical recession experienced in H2 2023.
But despite the significant improvements for households in April, Asda says it recognises that many families are still feeling the strain of the cost of living and continues to support communities and its customers by launching new value propositions and investing to maintain its position as the UK’s lowest-priced traditional supermarket.
Earlier this month, Asda announced new price cuts on hundreds of products worth £70 million, reducing prices by an average of 11%, as part of its focus on delivering uncompromising value for customers.
