The average UK family was £3 a week better off last month compared to the same period in 2008, according to a survey from grocer Asda.

The report found a typical household had £166 a week of discretionary income last month, a 1.8 per cent increase compared to the same time this year. The fall in mortgage payments and the declining costs of essentials such as food, electricity and gas have all helped increase spending power.

Discretionary spend has risen in all regions across the UK apart from in Northern Ireland, where the average family’s spending power has fallen by £2 per week.

Families in the south west had the largest increase in spending power at £5 per week, while London saw a gain of £1, partly due to a higher proportion of households renting property in the capital. Londoners spend more than the UK average on housing and utility costs, up 6.1 per cent year on year.

Asda president and chief executive Andy Bond said: “Whilst it’s reassuring to hear that UK consumers have more disposable income, people are still concerned about losing their jobs.  With weak growth in average earnings and falling house prices, it’s vitally important that retailers work hard to rebuild consumer confidence as quickly as possible.

“We need to do everything we can to strip out unnecessary cost from our businesses and deliver value in order to keep our shoppers spending.”

Asda’s Income Tracker is produced by the Centre for Economics and Business Research (Cebr).

Cebr economist Charles Davis said: “The Asda income tracker moved into positive territory as cost of living pressures eased – with inflation on the retail price index showing the largest decrease in prices since 1948. However, families continue to come under pressure from the weakest earnings growth since records began, rising unemployment and falling house prices.

“These factors underline the uncertainty that exists for households across the UK. Hence, the rise in spending power may not necessarily translate into a rise in consumer spending.”