cost of living
Published 28 Aug 2025
2 min read
Rising costs eat into households’ disposable incomes
Nearly two-thirds of families have seen their disposable incomes fall over the last year, new figures have revealed.
Published: 28 August 2025
According to Asda’s latest income tracker, the cost of essentials such as food, drink and transport went up by 5.1% in the year to July 2025.
This has, in turn, left many families with less money to spend on non-essentials or put into savings.
Figures showed that disposable incomes fell for 60% of UK households last month.
Low-income families are being particularly hard hit, with their spending power falling by 11.1%.
Meanwhile, middle-income families have seen the first decline in disposable income since September 2023.
Food prices driving up inflation
The fall in people’s disposable incomes comes against the backdrop of rising inflation.
Inflation jumped slightly to 3.8% in July - that’s up from 3.6% in June and the highest level since January 2024.
This has been fuelled partly by rising food prices.
In fact, food inflation has risen for four consecutive months and now stands at 4.9% - up from 4.5% in June.
How can you manage rising costs?
If you’re finding it hard to keep up with soaring living costs, there are ways to ease the pressure.
Check your benefits
You might be entitled to financial support from the government, so use our benefits calculator to find out what help is available to you.
Review your spending
Get on top of your budget, so you can clearly see how much money you have coming in and where it’s going.
Our budget calculator can help you see where possible savings can be made, so you can prioritise your spending and free up cash for vital expenses.
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.
James has spent almost 20 years writing news articles, guides and features, with a strong focus on the legal and financial services sectors.
Published: 28 August 2025
The information in this post was correct at the time of publishing. Please check when it was written, as information can go out of date over time.
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