Asda Income Tracker: Disposable income hits 12-month low

The grocer’s monthly income tracker showed the average UK family had £155 a week of discretionary income in April 2013, down £1 a week from the same month last year.

It represents a fall of £10 a week from its peak in February 2010 and the second year-on-year decline in two months.

Asda said rising unemployment and the lowest wage growth on record were both key factors in the fall in spending power in April. It was the steepest decline in wage growth since the start of the recession in 2008.

Average pay rose to just 0.8% over the year to April, the lowest rise on record since the Office of National Statistics began collecting comparable figures in 2001.

Unemployment in the UK also increased by 15,000 over the last year to 2.5 million, pushing the rate of unemployed to 7.8%.

Asda president and chief executive Andy Clarke said: “Whilst our income tracker records a drop in national wage growth, the increase in the personal tax allowance should relieve some pressure although it will take time before we see the knock on effects in consumer spending. This is consistent with the view that the economy is showing signs of recovery.”

“In April the income tax free allowance increased from £8,105 to £9,440. This helped to boost net household income by 2.1% to £582 and eased pressure on discretionary income, without which it would have declined by an additional £5.”

Clarke added that a 3.7% fall in the cost of fuel year-on-year was welcome news for motorists.