Inflation may be easing, but many households are still struggling

A fall in inflation is - on the face of it - good news. But life doesn’t feel any cheaper for lots of people, especially young adults and those on the lowest incomes.

Last month, inflation fell to 3% - the lowest level since March 2025.

And according to research from Asda, the average UK household had £261 a week left in January after essential spending - £4.24 more than a year earlier.

So far, so good, but this improvement isn’t being felt by everybody.

Young adults have less to spend

While the headline figure in Asda’s research is encouraging, it doesn’t tell the full story.

For example, under-30s were found to have an average disposable income of £175 a week in January.

So they have less to spend on non-essentials than they did a year ago, 

Asda believes this is partly because this group are less likely to own their own home, and as a result, are more exposed to soaring rental costs.

Meanwhile, many of these people will be paying a much bigger share of their income on essentials.

Low earners struggling too

Figures also show that the lowest 20% of earners are worse off than they were a year ago.

In fact, this group faced an average £71 monthly gap between their income and the cost of essentials like food and energy.

What can I do to manage rising costs?

If you’re struggling to keep up with ever-increasing costs, there are some steps you can take to ease the burden.

See what benefits you could claim

Find out what financial support from the government you could be entitled to.

Try our benefits calculator or get in touch to see if you’re getting all the help you’re eligible to receive.

Review your spending

Make sure you know how much money you have coming in and how it’s being spent.

You’ll then be able to see where you can make savings and prioritise money for essential expenses.

Check out our guide to how to create a budget to get started.

And give our budget planner a try - it’s free and easy to use.

Tackle problem debts

If cost-of-living pressures have led to you falling into debt, then get in touch for confidential, practical and impartial debt advice.