Report finds spending power of families has shrunk significantly

Families saw their “spending power” shrink by £35.57 per week in October compared with the same month a year earlier, according to an income tracker.

After paying tax and essential bills in October, the average household had £203 per week left – the lowest amount since August 2018 – the report from Asda found.

The index measures the amount of discretionary income UK households have left over to spend after essential bills such as groceries, energy, transport, mortgages or rent, and tax are subtracted.

The income tracker is produced by the Centre for Economics and Business Research (Cebr).

The under-30s saw the biggest annual fall in their spending power in October, while those aged 50-64 tended to be the most resilient, although all age groups saw their spending power shrink compared with October 2021.

Despite having shrinking budgets, the supermarket also found nine in 10 (92%) shoppers plan to spend the same or more on their children this Christmas.

However, more than half (54%) of adults intend to spend less on Christmas decorations this year. Some people also said they would cut back on spending for extended family members and friends compared with previous years.