The Office of National Statistic (ONS) has released their latest report on household spending.
The spending habits of UK households.
Their latest report, titled, Family spending in the UK from 2017 to March 2018, is an insight into the spending habits of households. It is broken down by household characteristics and types of spending.
Resulting in an average weekly household spending in the UK at £572.60.
Hence it is the highest level of household spending, after adjusting for inflation, since the previous peak in 2005, and a figure that has been climbing steadily upwards since hitting a low point in 2012, at the height of austerity.
The Main Points.
Average weekly household expenditure in the UK was £572.60 in the financial year ending 2018; the highest weekly spend since the financial year ending 2005, after adjusting for inflation.
Transport was the category with the highest average weekly spend of £80.80, equivalent to 14% of households’ average total weekly household expenditure.
Households with heads aged 50 to 74 years spent almost a quarter of their housing expenditure costs on alterations and improvements.
Average weekly household spending was the highest in London and the South East (over £650), whilst spending in the North East was the lowest, approximately £200 less.
Households with heads aged under 30 years and those in Northern Ireland spent the most on takeaway meals eaten at home, £7.80 and £8.60 respectively.
Average weekly spend on alcoholic drinks away from the home was less in the financial year ending 2018 (£8.00) compared with 10 years ago (£10.90), after adjusting for inflation.
Households in London spent the most on alcoholic drinks away from home, spending an average of £9.30 a week.
The low base interest rate, which despite a small increase in November 2017 remained low at 0.5% could be the reason. A low interest rate is a disincentive to save but it is an incentive to spend.
It can encourage households to buy more goods and services on credit, as well as taking out loans, which would influence higher levels of household spending.
For all quarters in FYE 2018, households were net borrowers. Meaning that they had to borrow, or use savings, to fund their spending and investment activities.
What did households spend their money on?
In FYE 2018, transport, followed by housing, fuel and power (excluding mortgages), and recreation and culture were the expenditure categories with the highest average weekly expenditure in the UK. Accounting for 40% of total average weekly household spending.
Households spent £80.80 a week on average on transport, 14% of weekly spend. £76.10 on housing, fuel and power,13% of weekly spend £74.60 on recreation and culture, 13% of weekly spend.
The survey has a 61 year history.
In the survey’s 61-year history, we have seen more spending on housing. Household spending on food and clothing as more than halved as cheaper imports have kept prices low.
Last month, the governor of the Bank of England warned that food prices could rise by as much as 10% in the event of a disorderly Brexit.
Other interesting insights from the survey show:
Under 30s spent the most on takeaways, £7.60 per week.
But,the amount we spend on alcohol has fallen over the last decade, once the cost of living is allowed for.
there’s a marked difference according to family wealth and age when it comes to buying takeaways.
Households with the lowest disposable income spent proportionally more on takeaway meals eaten at home. With the poorest 10% spending 19% of their catering services expenditure and the second-poorest spending 22%.
By contrast, the richest spent just 8% of their catering services expenditure on takeaways, the lowest proportion across all income groups.
Regional variation on household spending.
Average weekly household spending was the highest in London and the South East last year, while spending in the North East was the lowest.
In London, households spent an average of £658.30 a week, while in the South East, the figure was £657.50; that was more than £85 a week more than those in the next highest spending region, the South West.
In the North East, the weekly household spending figure was just £457.50, more than £200 less than families spent in the capital.
Scottish households spent an average of £492.20 a week, in Northern Ireland the figure was £488.50, while in Wales it was just £470.40.
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