According to the latest Legal & General MoneyMood survey, around 10 million households have spare cash after paying bills and debts, up from 9 million in April 2013.

The research suggests the average saved is £108, up from £88 a year ago.

The number of homes who say they are “struggling” – meaning their income is not enough to pay bills – has dropped by 600,000 to 2.3 million in May 2014, down from 2.9 million in April 2013.

John Pollock, CEO of Legal & General Assurance Society, said: “Our MoneyMood survey shows we are seeing signs of recovery in household finances. This indicates that the stronger UK economy has begun to produce an improvement in household finances up and down the country.”

Even though savings levels have moved in the right direction, major regional disparities still exist.

According to the research, there has been an increase in the number of households in four UK regions – London, Wales, the North East and Yorkshire and Humberside – struggling to pay bills compared with a year ago.

The biggest increase in monthly saving appears to be the North West where the average is £143, up £75 per month compared with last year.