THE latest Asda Income Tracker has revealed that families had £5 a week more discretionary income in February, 2014 than in the same month the year before.

The rise in discretionary income - the income left once taxes and the spend on essentials like rent, utilities and bills have been deducted - in February is the fastest increase seen since November, 2012.

Household incomes were boosted by two major factors, including slowing inflation, helped by a drop in petrol prices, and a 1.6% increase in private sector wages, which have experienced their fastest growth since December, 2012.

According to the latest figures, the average UK family had £169 a week of discretionary income in February, 2014, the fifth month in a row that families have seen their household incomes rise.

The figures indicate that the benefits of economic recovery are slowly beginning to feed through to UK households as weekly discretionary incomes climb even closer to the all-time high of £174 seen in January, 2010.

Falling petrol prices helped to boost family spending power in February as the cost of filling up a car dropped 5.1%, year on year. The cost of essential items, which rose over the past year by just 1.7%, helped keep inflation below the Bank of England’s two per cent target.

While slowing inflation had a positive impact on household finances, families are still struggling, however, with the cost of gas and electricity prices, which rose 5.9% and 6.9% respectively compared with the same month the year before.

While wages in the private sector grew 1.6%, public sector wages experienced slower growth, at just 0.6% in the three months to January, 2014. Overall, average UK wages grew 1.3%, which represents the fastest growth since the three months to December, 2012.

The jobs market still remains tough, with unemployment remaining largely unchanged at 7.2%. In comparison to last year, however, unemployment is down 0.7%, meaning an extra 459,000 people are in work.

President and chief executive of Asda, Andy Clarke, said: “At a time when household budgets remain under pressure, the continuing rise in disposable income should be a positive sign that families are finally feeling the benefit of the economic recovery. However, our customers are telling us that it’s still tough out there and that they face a long road to financial stability.

“Recovery, to me, is about how real people are feeling, so even though a further drop in things such as essential item inflation and the price of fuel may help to slightly ease the burden, confidence in a full recovery remains low.

"The Budget has addressed some concerns around spiralling energy bills and childcare costs, both of which were high on the agenda in our recent Mumdex research, but these benefits now need to reach the pockets of customers throughout the UK to truly make a difference.”

Rob Harbron, senior economist, Cebr, said: “More favourable conditions for UK households are starting to emerge at last, as the Income Tracker saw its fastest growth rate in over a year.

“The slowdown in inflation is helping to ease the pressure on household budgets, while the economic recovery is finally starting to feed through into wage growth, which is now starting to accelerate.”