Brits getting a bit richer

For the first time in a year we’re a bit better off than we were last year.

Good news! We’re richer than we were in 2011. For the first time in a year Britons have more spare cash than they did 12 months ago, new figures show.

But before you break out the party hats and cake, we should point out that – on average – UK residents are only £7 a month better off.

Why we’re better off

While Britain’s far from being out of the woods, there are some small improvements. Oil prices tumbled from $126 a barrel in March to about $100 in the last few months, seeing inflation fall to its lowest level since November 2009 while pay is rising at 1.4% year on year according to the latest official figures.

And all this combined with an increased tax-free allowance to make Britons 0.3% richer last month, according to research from Lloyds TSB that looked at the amount of money coming into and going out of people’s bank accounts.

"Finally consumers are starting to see some of the benefits of lower inflation," said Lloyds TSB chief economist Patrick Foley.

But while things are improving, it comes after a long downward slide and the increase is a small one. Just £80 a year or £7 a month.

"It has taken a while but the fall in inflation has fed through to spending on essentials. Although spending power is heading in the right direction it remains far from healthy, in particular because income growth remains weak," Foley added.

[Related story: Inflation falls to two-and-a-half year low]

The good news

When Lloyds tool a look at what people were spending on last month, it found the amount we were shelling out on essentials was at its lowest this year.

The amount spend on debts was down 0.6% on last year, the amount spent on on gas, electricity, water, food and council tax was broadly unchanged and while money spent on petrol was 1.6% higher than last year – that’s the smallest increase for months. To compare, at the start of the year we were spending 11% more a month to fill up our cars.

To compare with that, the amount of money people have coming in is rising. Lloyds figures show that on average Britons have 2.8% more money coming intro their bank accounts each month.

Nobody getting excited

While things might be getting a bit better, nine people in 10 still think the country’s financial situation is “not good”, while even more think things are worrying when it comes to jobs.

Three people in four are worried about price rises and more than that think house prices are in a bad place, figures from Lloyds show.

"We are still a long way from consumers having a huge amount of confidence in the economy," said Jatin Patel, director of current accounts for Lloyds TSB.

"That more people have money left over once they have covered their monthly outgoings is positive, but with many still negative about the outlook for employment, it is unlikely that this will translate into a lot more spending in the high street. It is more likely that we will see people concentrating any spare cash on paying down debts or savings for a rainy day."