One in five UK households have just £12 a week left after paying essential bills, according to new research from the Centre for Economics and Business Research (Cebr). The findings, compiled for supermarket chain Asda's Income Tracker, reveal that the 20% lowest-earning families face an average weekly shortfall of £73.
Average Disposable Income Rises Marginally
The average UK household now has £258 per week after taxes and essential bills, up just £8.28 from a year ago. However, this modest increase masks significant disparities. Higher-income households continue to see growth in disposable income, as essentials like food account for a smaller share of their spending, insulating them from price rises.
Inflation and Labour Market Pressures
The cost of living crisis persists amid challenging economic conditions. Inflation has eased to 2.8%, but concerns remain that it could rise again due to the economic fallout from the Middle East war. Many workers' pay is barely keeping pace with inflation, while a soft labour market and rising energy costs continue to strain household finances.
Sam Miley, head of forecasting and thought leadership at Cebr, said: “The Asda Income Tracker continued to show weak momentum in May 2026. While annual growth came in at 3.3%, discretionary incomes grew by only 0.6% month-on-month and remain below the levels seen in January of this year.”
Food Price Inflation Eases Slightly
Separate data from Worldpanel by Numerator showed a welcome drop in food price inflation from 3.1% to 3% in the past month, offering some relief for households struggling to make ends meet. However, experts predict grocery bills could rise in the coming months due to the legacy of the Middle East war's economic impact.
Summer Sales Boost
Supermarket sales rose 2.4% in the four weeks to mid-June, coinciding with the UK's hottest May day on record and a 10-day heatwave. Demand for summer staples surged: suncare sales more than doubled, while fresh beef burgers were up 40%.
