FAMILIES across the South West ended the year with more pounds in their pockets than ever before, according to the latest Asda Income Tracker.

In December, families were £14 a week better off than in the same month last year – the largest annual increase in family spending for six years.

The results mean that as we start the New Year, families in the region had £161 per week to spend once taxes and bills had been paid for – a £14 increase on the previous quarter.

Household finances have largely been boosted by the recent and significant fall in petrol, electricity and gas prices.

The price of filling up the tank fell a record 10.5% in December from the same time last year as the cost of petrol dropped to just 116.3 per litre and diesel to 122.2 per litre. Meanwhile, electricity and gas prices dropped 2.1% year on year.

Also helping families to beat the January blues has been the falling price of food and drink, which fell 1.7% in December compared to the same time last year. With supermarkets pledging to invest millions of extra pounds in prices this year, this trend is set to continue as we head further into 2015.

Further adding to family spending power, Brits are now earning more but paying less for the essential items they need; in December, essential item inflation fell to just 0.2% while wages grew at 1.8%. This week the government announced that unemployment had reached its lowest level in six years and now stands at 5.8%.

Commenting on the findings, President and CEO of Asda, Andy Clarke, said: “January is always a tough time for families as they rebalance the books after the Christmas holidays, but I’m pleased to say - with prices falling steadily at the pumps as well as at checkouts, families across all regions of the UK will have on average £15 per week more in their pockets as we enter into the New Year.”

Sam Alderson, Economist, Cebr, said: “Households are currently experiencing a considerable boost to their finances from the combined effects of rapidly falling, record low inflation, rising employment, and wage growth at its fastest since the financial crisis.

“It’s encouraging to see the economic tide finally turn in the favour of UK households, after a long and difficult period since the 2008-09 recession.”