If you care to get accurate insights on what British families spend their money on, look no further. Below is a summary from the ONS (Office for National Statistics) in the UK. The information highlights family spending as of 2016.
According to the latest ONS statistics, the average weekly household spending remains at £528.90 for the year ending 2016. Most low-income households in the UK continue to spend a higher portion of their income on food and energy bills compared to high-income households.
Mobile communication costs have risen significantly. Over 50% of all the money spent by UK households on communication is spent on mobile phone related costs. Expenditure on tobacco, alcohol, and narcotics has fallen below £12 for the first time. Expenditure on restaurants and hotels has however risen by over £45 a week. This is the 1st time this has happened in 5 years. Below are important background spending statistics.
Average spending remains at £528.90. However, when adjusted for inflation, spending appears to have increased but is not yet at the levels experienced before the 2007 economic turndown.
When you compare expenditure against other economic indicators like the GDP (Gross Domestic Product), output has grown steadily. The employment rate has also increased. The average earnings and median disposable income has also increased (after being adjusted for inflation). However, disposable income grew at a slower pace for the richest 1/5th households. The median income for UK’s richest households has fallen since the 2007/2008 economic downturn.
The prices of goods and services affect spending patterns. Inflation shows the rate at which the prices of goods/services rise or fall. During the financial year 2015/2016, inflation as per the consumer prices index was significantly lower compared to the previous financial year. In fact, the UK entered a deflation period which simply means the cost of goods/services remained the same or became cheaper in 2015/2016.
Consumer confidence increased during the last financial year. The UK has been on an upward trend in regards to consumer spending since the 2007/2008 economic downturn. Consumer confidence has increased significantly since 2013.
Household expenditure according to category
The average British household spends the most on transport, housing, fuel and power bills. The average amount of money spent per week on transport in the financial year 2015/2016 was £72.70. The highest expenditure was on fuel costs i.e. petrol and diesel costs. Compared to the previous financial year, the average expenditure on transport remains unchanged. The overall spending on motor fuels decreased this financial year due to the drop in crude oil prices globally. Also, more Britons bought new and second-hand cars this year compared to last year. There was an increase in uptake of loans for buying new vehicles.
Britons spent the least on education i.e. £7 per week (1% of the total expenditure). Transport costs were the highest at £72.70 per week followed by housing, fuel and power costs at £72.50 (both 14%). The third highest expenditure was on recreation and culture at £68 per week followed by food and nonalcoholic drinks (£56.8), restaurant and hotels (£45.1), miscellaneous goods/service (£39.7), household goods and services (£35.5), clothing and footwear (£23.5) and communication (£16). British households spend £11.4 on alcohol, tobacco and narcotics and £7.2 on health.
Household expenditure according to region
London households have the highest average expenditure at £652.40 per week. The North East region has the lowest household expenditure at £423.50 primarily because of lower housing costs. The highest expenditure category for most regions is transport, housing, fuel, and power. As a result, it doesn’t really matter when you live in Britain. Most Britons spend most of their money on transport, housing, fuel, and power. There are however a few exceptions. In the North East, North West as well as Yorkshire & the Humber for instance, families spend the most on recreation and culture.
Other important spending statistics/information
The latest spending statistics indicate that low-income households spend more on food and non-alcoholic drinks. Most of the money spent on food goes to milk, bread, and groceries. While low-income households spend most of their food budget on basic groceries, higher-income households spend most of their food money on vegetables. In general, households with less income have less money to spend on nonessentials.