The findings, which are revealed in Asda’s latest Income Tracker report, show NI’s families now have £143 per week of income at their disposal, once all essential items and bills have been paid.
This represents the highest ever value in the series. The 18.7% y-o-y increase is also the fastest growth rate of any UK region.
It carries on from fast paced growth in Q4 of 2020 and contrasts sharply to London which was the slowest growing region at 8%.
In real terms it means local households were on average £23 better off each week compared to the start of spring last year when lockdown began and families were first impacted by reduced working hours and furlough.
However Northern Ireland remains the lowest performing region in terms of spending power and is substantially below the UK average of £246 of disposable income per week. The closest region to Northern Ireland is the North East of England where families have £169 per week at their disposal, and the greatest gap is with London at £297 per week.
Northern Ireland households also tend to see a larger proportion of their income stemming from social security benefits. Likewise, many families have gained from the uplift in Universal Credit, and this will continue to pay dividend given the recent extension to the benefit payment.
NI’s reliance on the public sector, which amounts to just over a quarter of the total workforce, is a further factor impacting on spending power growth, particularly when coupled with the benefit of stronger public sector pay growth.
Across the UK as a whole Asda’s Income Tracker highlights how a rise in spending power coincides with a sense of increased optimism, with 40% of consumers saying they now feel more positive about the future, compared to just 4% last November as the second wave and further lockdown loomed.
The recent relaxation in restrictions which have allowed people to see friends and family outdoors, as well as enjoying days out are also contributing to positive outlooks, with 42% saying they are beginning to ‘feel normal’ again.
This is particularly true of many over-65s, who feel safer because they have been vaccinated. This group has been less financially affected by the pandemic with 47% saying they have savings and now plan to treat their families. In contrast, younger people have been financially stretched by the pandemic, with 86% of 18 to 34 year olds having no savings at present.
Sam Miley, Economist at CEBR, said: “Households in Northern Ireland have benefitted more than most in the past year as the unique circumstances provided by the pandemic and associated policy measures have boosted discretionary incomes. The uplift to Universal Credit has been a key factor, particularly for those at the lower end of the income scale, while the combination of Northern Ireland’s relatively low unemployment rate and the furlough scheme have provided further sources of resilience. Despite this general positivity, it should be noted that the headline figure does mask some diverging fortunes, with a not insignificant portion of households having struggled amidst pandemic-induced income losses.”
Joe McDonald, Snr Manager, Corporate Affairs, Asda NI added: “Limited spending over the lockdown, together with a £28 per week increase in discretionary income is very positive news for NI families and will hopefully help to drive a bounce back as restrictions ease in the weeks ahead and the move to recovery gets underway.
“However, while most households do have that extra disposable income we are seeing somewhat of a ‘k-shaped’ recovery where others are much worse off. It is clear that the financial pressures and implications of reduced working hours and job uncertainty are still being felt by many families and that means it remains as vital as ever that we offer them great value when they shop with us.”
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