The Office for National Statistics (ONS) measured a 4.5 per cent increase in household disposable income on an annual basis in the first quarter of the year, Sky News reports.
It was against a backdrop of low inflation and a rise in wage growth, boosting family budgets following six years of pay rises largely lagging inflation.
The news signalled the prospect of consumers contributing even more to UK GDP growth, with spending by members of the public driving the recovery in the wake of the financial crisis.
A separate consumer confidence report by GfK released on Tuesday found spending on big ticket items, such as furniture and bulky electricals, was set to rise as its measure of confidence hit a 15-year high.
The ONS said the UK economy grew 0.4 per cent in the first three months of the year, up from earlier estimates of 0.3 per cent.
It cited improved information on business investment and construction output.
GDP growth on an annual basis was revised sharply higher from 2.5 per cent to 2.9 per cent during the first quarter.
It was seen as good news for the Chancellor ahead of his Budget next week though the ONS also confirmed that the country’s current account deficit stood at 5.9 per cent of GDP in 2014, its highest level since records began in 1948.
George Osborne said: “I welcome today’s news that growth was stronger than previously thought in both the first quarter of this year and the whole of 2014.
“It is clear that our plan is laying the foundations for economic security for working people, with the three main sectors of the economy growing over the past year and business investment over 30 per cent higher than at the start of the last parliament.
“Today’s figures are another reminder that the economic plan we’ve pursued in Britain these last five years has increased our resilience – and we will take whatever further steps are needed to protect the UK from the new risks we see to our economic security.”
He has identified the crisis in Greece as a major threat – given its potential to hurt demand in the eurozone – the UK’s biggest export market.