Recent research indicates that one in five households in the UK is left with as little as £12 per week after covering essential bills. Data from Asda’s Income Tracker, compiled by the Centre for Economics & Business Research (CEBR), highlights the ongoing strain on low-income families during the cost of living crisis.

The situation is particularly severe for the lowest-earning 20% of households, who face an average weekly shortfall of £73, rendering them unable to meet basic expenses such as food and household bills. This underscores the persistent financial challenges faced by vulnerable groups despite some improvements in overall disposable incomes.

On average, after deducting necessities, households have £258 remaining each week—an increase of only £8.28 compared to the previous year. The modest rise comes amid wider economic pressures, including stagnant wage growth that struggles to keep pace with inflation, a less robust labor market, and elevated energy prices.

Inflation has recently declined to 2.8%, offering some relief, but concerns remain about potential increases driven by global geopolitical tensions, particularly following the conflict involving Israel, the United States, and Iran. These international developments could exacerbate inflationary pressures and impact household finances further.

Sam Miley, head of forecasting at CEBR, noted that disposable incomes showed limited growth in May 2026, stating that while annual growth reached 3.3%, the month-on-month rise was only 0.6%, keeping spending capacity below levels observed earlier in the year.

Meanwhile, data from Worldpanel by Numerator revealed a slight reduction in food price inflation over the past month, dropping from 3.1% to 3%. However, experts warn that grocery costs may climb again as supply chains and commodity prices feel the impact of escalating tensions in the Middle East.

The findings reveal a landscape where subtle improvements in household finances are overshadowed by persistent difficulties, particularly for low-income families, and the looming possibility of renewed inflationary challenges as global events unfold.