UK households had slightly more money left over after paying essential bills in May, but many families are still under financial pressure, according to the latest Income Tracker published by Asda Stores Ltd and the Centre for Economics and Business Research.
The report found that the average UK household had £258 per week of disposable income remaining after paying taxes and essential spending, including food, utilities and housing costs. That was £8.28 more per week than in May 2025.
However, the figures also show that financial pressures remain widespread despite lower inflation and easing food price increases.
At a glance
- Average disposable household income reached £258 per week in May.
- Households had £8.28 more per week than a year earlier.
- Inflation remained at 2.8%, its joint-lowest level since March 2025.
- Around 20% of households had only £12 left each week after essential spending.
- The lowest-income 20% of households faced a weekly shortfall of about £73.
- Weak wage growth and higher energy costs continue to pressure household budgets.
- Economists expect conditions to become more challenging later in the year.
What is the Asda Income Tracker?
The Asda Income Tracker is a monthly measure of how much money UK households have available for discretionary spending after paying taxes and essential costs such as food, housing and utility bills. It is widely used by retailers and economists to gauge consumer confidence and spending power.
Why are many households still struggling?
Although inflation has slowed and food price increases have moderated, many families continue to face pressure from rising living costs.
The report highlights that one in five households have only £12 left per week after essential spending. Meanwhile, the lowest-earning households remain unable to fully cover basic costs, with spending exceeding income by an average of £73 per week.
Weak wage growth and a softer labour market have also reduced the pace of improvements in household finances.
What does this mean for supermarkets?
Consumer spending pressures continue to shape the UK’s grocery market.
Retailers are increasingly focusing on value, promotions and price investment as shoppers remain cautious about discretionary spending. The latest figures suggest that many consumers are still prioritising essential purchases and seeking lower prices on everyday goods.
Asda said it has continued to lower prices on hundreds of products, including beef mince, pork sausages, eggs, baby potatoes and baked beans.
The retailer also reiterated its position as the UK’s cheapest full-range supermarket, saying thousands of its products are priced below equivalent items sold by competitors including Tesco plc, J Sainsbury plc and Wm Morrison Supermarkets Limited.
What happens next?
Economists expect household finances to face additional challenges during the second half of 2026.
Energy prices are expected to rise again when household tariffs are recalibrated in July, while weaker labour market conditions could further limit income growth. Expectations for interest rate cuts have also been pushed back, potentially delaying any stronger recovery in consumer spending.
For supermarkets, the outlook suggests that competition on price and value is likely to remain intense as retailers seek to attract budget-conscious shoppers.
UK supermarket retailers are likely to maintain a strong focus on affordability and promotional pricing as many households continue to experience pressure on disposable incomes despite modest annual improvements.
