Family disposable incomes hit an 11-year high in March – showing a marked improvement on the start of lockdown in March last year – and meaning many families are feeling far more optimistic about the future.
The research from Asda’s latest Income Tracker showed the average family disposable income increased by 13.1% year-on-year in March, meaning households were on average £28 better off each week compared to the same period last year when lockdown began, and families were first impacted by reduced working hours and furlough.
Northern Ireland has seen the biggest bounce back compared to this time last year with disposable incomes increasing by 19% year-on-year, while London, in contrast was the region with the slowest annual growth with an uptick of 8%.
The significant uplift in the average family disposable income has been attributed to the ongoing limited spending opportunities due to lockdown restrictions, coupled with some households across the UK benefitting from strong annual wage growth in total pay of 3.9% in recent months.
The rise in spending power also coincides with increased optimism amongst many customers, with 40% saying they now feel more positive about the future, compared to just 4% last November as the second wave hit the UK.
The recent relaxation in restrictions which have allowed people to see friends and family outdoors, as well as enjoying days out are also contributing to positive outlooks, with 42% saying they are beginning to ‘feel normal’ again.
This is particularly true of many over-65s, who feel safer because they have been vaccinated. This group has been less financially affected by the pandemic with 47% saying they have savings and now plan to treat their families. In contrast, younger people have been financially stretched by the pandemic, with 86% of 18 to 34 year olds having no savings at present.
Rob McWilliam, Asda’s Chief Finance Officer, commented: “With families benefitting from an extra £28 in their pockets each week and lockdown restrictions easing, we have seen a notable increase in the number of customers feeling positive about the future. With a further easing of restrictions next week, almost 60% of those we recently spoke to said they are looking forward to enjoying larger get-togethers with friends and family.
“However, while most households do have that extra disposable income we are seeing somewhat of a ‘k-shaped’ recovery where others are much worse off. It is clear that the financial pressures and implications of reduced working hours and job uncertainty are still being felt by many thousands of families across the UK and that means it remains as vital as ever that we offer them great value when they shop with us.”