More than half of households feel they are worse off than a year ago.
While the GfK Consumer Confidence Index edged up to -16 in January 2026 from -17 in December, the latest Asda Income Tracker reveals that nearly six in ten households now feel their weekly pay packet doesn’t stretch as far as it did a year ago.
The tracker, compiled by the Centre for Economics and Business Research, found the average UK household with £256 a week in discretionary income: the figure had been growing for the past quarter.
The lowest 20% of earners saw their spending power fall by 5% year on year leaving them with a £73 shortfall and unable to cover essential bills and everyday spending.
Middle-earning households, earning between £25,000 and £41,000 a year – 40% of all UK households – are now also worse off.
Spending power for households earning about £25,000 a year has since fallen by 7.1% compared with the same period last year, leaving them with just £12 a week to spend after essential costs.
‘2025 has been a mixed year for the Income Tracker. Low inflation and strong earnings growth saw nominal discretionary incomes rise to record highs at the start of the year, before increases to employment taxes and wage floors in April increased cost pressure on businesses. This caused stronger inflation and weaker labour market conditions, prompting growth in the Income Tracker to stagnate,’ Sam Miley, Cebr head of forecasting.
‘While Q4 has shown signs of recovery for household purchasing power, this has largely been down to a slowdown in underlying price pressures, rather than an acceleration in earnings growth. Looking ahead, despite an uptick in inflation in December, we expect this trend to continue over the first half of 2026. Easing price pressures and weakening earnings growth are competing influences on the Income Tracker, creating substantial uncertainty for future performance.’
