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Asda Income Tracker reports a rise in family spending power for January

According to the latest Asda Income Tracker, released today (February 28th, 2013), family-spending power increased by £5 a week in January 2013 – the largest increase in five months.

- UK families were £5 a week better off in January 2013 compared to the same month last year, but still had £3 less than they did two years ago

- The average UK household had £158 a week of discretionary income in January 2013

This improvement in disposable income was primarily driven by a decline in the level of unemployment over the last 12 months. The number of people in work rose by 584,000 over the course of the year to 29.7 million.

Although the rise in disposable income marks a 3.4 per cent increase on January 2012 budgets, family-spending power is still £3 lower than it was two years earlier, suggesting that family finances are still under pressure as we enter the new year.

Weak wage growth, housing costs – including rental and energy prices, and food price inflation continue to put pressure on disposable income. Mortgage interest payments, for example, are up 4.5 per cent year-on-year, well above the average of 2.7 per cent recorded in 2011 and 2012.

The latest rise in the Income Tracker means that disposable income has not fallen year-on-year since May 2012. However, despite this increase, research carried out for Asda’s fifth Mumdex report, to be released in March, shows that mums are still apprehensive about the state of the economy and their own family finances.

The Mumdex research- taken from a panel of 5,500 Asda mums of varying ages and backgrounds – highlights the extent of their concerns:

- Half of mums fear the UK economy will never be the same again

- 95% of mums say their standard of living is the same or worse than it was a year ago

- Over 60% of mums say they can’t afford to turn the heating on for as long as they need to

- Mums feel that the cost of living, as an issue, is three times as pressing as youth unemployment and four times as pressing as violent crime

- 55% are saving less than they were a year ago and half dipped into their savings last year

- Families, as a result, are now not only cutting back on the luxuries, like holidays and electrical items, but are also struggling to afford the basics like heating and using their cars.

Andy Clarke, President and CEO of Asda, said:

“Although our latest figures show a small but welcome improvement in monthly spending power, there remains a big difference between what people have in their pockets and what they are confident in spending.

“Families are continuing to look at ways to cut their spend and make their budgets go further. Nearly half of mums, for instance, are only part filling their cars with petrol, while many shoppers in our stores have told me that they are having to budget more than ever before.

“With 40% of Asda mums predicting that their quality of life and spending power may never return to pre-recession levels, it is crucial that the retail industry takes action and invests in keeping the cost of essentials down.”

Charles Davis, Head of Macroeconomics at CEBR said:

“It is encouraging to see an annual increase in household discretionary incomes. However, it is clear that a cautious outlook remains for family finances and annual growth on the Income Tracker may slow later in the year.

“Further public sector job losses are planned for 2013 and wage growth remains very low. In addition, inflation is likely to remain elevated, pushed up over the coming months by rises in the cost of housing and transport. The recent rise in oil prices is likely to put upward pressure on the cost of petrol in the coming months.”

Source : Asda
http://your.asda.com/press-centre/increase-in-disposable-income-provides-a-glimmer-of-hope-for-mums-but-rising-bills-remain-a-cause-for-concern

28 February 2013
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