The average UK household will be £1,300 a year worse off by 2018 according to a special one-off report out today.
The next five years will continue to be tough for consumers – but there is light at the end of the tunnel as household disposable incomes look set to rise again towards the end of 2018.
The findings are based on research carried out by the Centre for Economic and Business Research (CEBR) for Asda to mark five years of the Asda Income Tracker. We’ve been tracking customers’ spending power since the start of the financial crisis. Our monthly Income Tracker measures how much families have left to spend each week after paying for essentials such as electricity and fuel, food and housing costs.
Based on this we predict that by 2018 the average UK household will spend £3,900 a year more on essential items – like transport, utilities and housing – than they do now.
The average UK household is now £868 a year worse off in real terms than they were in 2009. By 2018 this will be squeezed even further as the cost of living rises while the average household disposable income will remain at around £160 a week.
Not everyone will be affected in the same way – the hardest hit will be the under 30s and the families on the lowest incomes.
Our CEO Andy Clarke is calling for the Government and business leader to do more to ease the pressure and help those who are struggling the most. Earlier this week he called for free bus passes for 16 to 24-year-olds to help them get to job interviews and in to work.
He would also like to see better opportunities for the one million young people currently out of work and an increase in the income tax threshold to £12,875 to bring it into line with the salary of someone on the national minimum wage.
Andy says: “Looking ahead to the next five years, one thing is clear: it’s going to remain incredibly tough for consumers. While the economy may be on the road to recovery the economic reality for them is very different depending on where you live and your age.”
He is taking part in a panel debate on the issue in London today, joined by journalist and broadcaster Nick Robinson, Executive Chairman and Founder of CEBR Doug McWilliams, CEO of The Resolution Foundation Gavin Kelly, Esther McVey MP, Minister at the Department of Work and Pensions, and Clippy McKenna, a mum, entrepreneur and founder of the Clippy’s brand of chutneys and relishes. You can join the debate on Twitter using the hashtag #asdaincometracker.