Families across the UK ended the year with more pounds in their pockets than ever before, according to the latest Asda Income Tracker. In December, families were £15 a week better off than in the same month in 2014. As we start the New Year, families had £180 per week to spend once taxes and bills had been paid for.
Household finances have largely been boosted by the recent and significant fall in petrol, electricity and gas prices. The price of filling up the tank fell a record 10.5% in December from the same time last year as the cost of petrol dropped to just 116.3 per litre and diesel to 122.2 per litre. Meanwhile, electricity and gas prices dropped 2.1% year on year.
Also helping families to beat the January blues has been the falling price of food and drink, which fell 1.7% in December compared to the same time last year. With supermarkets pledging to invest millions of extra pounds in prices this year, this trend is set to continue as we head further into 2015.
Further adding to family spending power, Brits are now earning more but paying less for the essential items they need; in December, essential item inflation fell to just 0.2% while wages grew to 1.8%. This week the government announced that unemployment had reached its lowest level in six years and now stands at 5.8%.
Sam Alderson, economist, Cebr, said: “Households are currently experiencing a considerable boost to their finances from the combined effects of rapidly falling, record low inflation, rising employment, and wage growth at its fastest since the financial crisis.”
Across the regions:
- With the exception of Wales, all regions in the UK saw an acceleration in income growth driven by a combination of increasing employment and pay growth.
- The largest increases in household income in the final quarter of 2014 were seen in the West Midlands and London, with incomes rising by 2.9% and 2.8% respectively in the last 12 months.
- Households in Northern Ireland are also experiencing rapid increases in discretionary spending power, which is estimated to have increased by 14.1% year on year to £88 a week.
- In Scotland, the cost of living has risen just 0.1% over the past year, helping to ease pressure on household finances.
- In Wales, despite the sharp fall in essential item inflation in recent months, a fall in gross income growth meant the country was the only part of the UK to see discretionary income growth fall in the final quarter of 2014.