Households enjoy more spare cash this Christmas

The retail giant revealed that the average UK household had £179 a week to spend on non-essential items last month, which is £11 more than in November 2013 and the highest annual increase in disposable incomes since 2009.

“In November 2014, average household discretionary incomes excluding bonuses were 6.7 per cent higher than at the same point a year before,” said the report.

“Following a period of stagnant or falling discretionary incomes through the middle of 2014, average spending power has now risen year-on-year for fourteen months. This represents a welcome turnaround for UK households.”

Budgets have been boosted by a 1.6 per cent increase in wages and a fall in the consumer price inflation rate to 1 per cent – the lowest rate recorded in over 12 years.

This helped drive down the cost of essential items last month – with food and fuel prices down 1.7 per cent and 6 per cent respectively.

The report predicted that disposable incomes would increase further in the first months of 2015 as inflation rates continue to drop.

Sam Alderson, economist at Cebr – the organisation which compiled the report - said: “The falling cost of essential items such as fuel and food has brightened the economic environment facing UK households in recent months and freed up income for families to enjoy over the holiday season.

“With average weekly earnings beginning to strengthen and inflation likely to fall further in coming months, households look set to enjoy further boosts to spending power in the New Year.”