One in five households in Britain has a ‘negative disposable income’

One in five households in Britain has a ‘negative disposable income’

One in five British households now have a “negative disposable income” where they are £60 short of meeting their essential needs such as rent, energy, food and transport.

Data compiled by the Center for Business and Economic Research (CBR) in the monthly Asda Income Tracker showed that the cost of living, which rose 11 per cent in the year to June, rose to a record 18 per cent. Declining percentage of household disposable income.

The fall means households now have £43.95 less per week, or £175.80 less per month, to spend on non-essential items than last year, with disposable income falling to just £200 per month after tax and other essentials. June was the eighth month in a row to see disposable income decline.

More worryingly, the bottom 20 per cent of households now have a negative disposable income of £60, meaning their income does not cover life’s basic needs.

Commenting on the cost of living for families, Mark Nalder, Head of Payments at Building Society Nationwide, said: guardian: “Following the peak in spending in May, our data suggests that households are starting to cut back across the board and where they can. This is happening as we enter the summer season where consumers will want to indulge themselves, so it will be interesting to see how these often conflicting interests are balanced.

“As we head into the holiday season, we expect the budget to continue to be a feature as the nation prepares for more spending as inflation continues to climb and the energy price cap increases again this fall.”

The economic pressure comes as real wages (excluding bonuses) fell at the fastest rate since records began in 2000, falling 3.7 percent in May.

As well as seeing their wages cut, Britons have also been hit by increased costs at the supermarket, with the average household seeing their grocery bill increase by £454 a year, as food inflation hit its highest level since the 2008 financial crisis. , food prices rose 9.9 percent this month

A political debate is currently raging over what to do about Britain’s growing economic crisis, with two candidates vying to replace Boris Johnson as leader of the Tory Party and therefore as prime minister, former chancellor Rishi Sunak and foreign secretary Liz Truss. Different answers to problems.

Truss argued for immediate tax cuts to ease the pressure on people trying to make ends meet, while Mr Sunak said tax rates — which reached a seventy-year high during his tenure as head of the Treasury — should be maintained until inflation is brought down, arguing that An increase in the discretionary spending power of the public will further increase inflation.

Follow Kurt Jindulka on Twitter here @Kurtzindulka

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