The latest Asda Income Tracker offers a reminder that headline figures on household finances can hide a world of difference.
Average discretionary income crept up by about 1% in October, the fastest monthly improvement this year, yet that modest progress disguises a sharp divide between higher and lower earners.
According to Shore Capital’s analysis, the top two income quintiles saw small gains in spending power over the past year, up 1.3% and 2.4% respectively.
The bottom half, though, fared far worse. The lowest quintile was 9.5% worse off, the next 27.5% down, and even the middle bracket slipped by 2.4%.
Rising costs for essentials such as food and energy continue to squeeze the lower-income groups most. Fiscal drag, the effect of frozen tax thresholds pulling more people into higher bands, has added to the pressure.
The result is an uneven picture: average discretionary income now stands at £254 a week, up from September but still reflecting a fragile recovery.
ShoreCap notes that this squeeze helps explain why value-focused retailers such as Asda, B&M and Greggs have struggled to maintain momentum.
Geographically, income growth has slowed across most of the UK, with only Wales showing a slight improvement. ShoreCap expects real living standards to keep rising, but at a slower pace, as wage growth and inflation gradually converge.
The broader backdrop remains challenging. Consumer confidence is still negative, base rates sit at 4%, and higher taxes are likely to loom large in the next Budget.
The analysts describe the UK consumer economy as entering a new “curate’s egg” phase, good in parts but hardly booming.
They see no collapse in sight, but nor is a broad rebound likely. Lower interest rates could offer relief, yet ShoreCap doubts households will rush to spend their savings.
For now, Britain’s shoppers remain cautious, pragmatic and weary of promises from Westminster.