How do Brits spend their money?

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Do you know how much money your household spends every month?

According to the Office for National Statistics (ONS)*, the average UK household spends around £529 a week, which works out at around £2292 every month and over £27,500 a year.

Unsurprisingly, the data shows that London-based households are the ones who spend the most. Based on the ONS figures, families and households in London will have average total annual outgoings of just under £34,000 a year. The area of the UK which spends the least, on average, is the North East, with annual spending of just over £22,000 a year per household.

Where does the money go?

money spend

The ONS data shows that housing and transport costs take up the largest proportion of household income, which won’t come as a surprise to many.

The average renting household across the UK spend around 19% of their total outgoings on rent, whilst mortgage holders spend around 13% of theirs on their monthly mortgage payments. Households with cars spend an average of just over £1,000 a year on petrol/diesel, plus all of the other running and maintenance costs. Other transport services, such as train and bus fares, make up an average annual cost of around £900 per household.

The next biggest chunk of expenditure, according to the ONS, goes on recreation and culture, which includes everything from holidays, cinema trips and gym memberships, to premium TV channels, newspapers and pets. This comes in at 13%.

Food and non-alcoholic drinks come out of the study at around 11% of the average household’s spend, and eating out in restaurants or staying in hotels accounts for approx. 9%.

Around 14% of the average family’s expenditure goes on a mixture of household goods, like appliances, furnishings and on gardening, and miscellaneous services and products, such as insurance premiums, health and beauty care, and jewellery.

Clothing and footwear account for around 4% of a household’s total average spend, and the remaining expenditure goes on everything from mobile phone contracts and home internet, to alcohol & tobacco, health and education.

Do people spend differently, depending on where they live?

spending based on location

The ONS data shows that renting in London is around 82% more expensive than the national average rent across the UK, which won’t come as much of a surprise to those who live there.

When it comes to spending on recreation and culture though, Londoners are shown to spend less on average than those living in the North East, North West and Yorkshire and the Humber.

Only 78% of the households in Northern Ireland have home internet, compared to 88% across the whole UK. Twenty years ago, in 1997, only 9% of households in the UK had the internet at home!

What difference does income make to how households spend their money?

Household money spend

The ONS data shows that those on a lower income spend 17% of their total expenditure on food and non-alcoholic drinks, whereas higher-income households spend 8% of theirs. Higher income households were found to spend a higher proportion of their food budget on vegetables than those on a lower income.

45% of households with lower incomes do not have home internet. 100% of higher income households now have home internet services.

Do households save up for bigger purchases and emergencies?

1 in 4 families or households in the UK are classed as low income. This refers to those with net earnings of under £1,500 per month.

Low-income families had an average of £95, or less, put by for emergencies in winter 2016. This was compared to an average savings and investment portfolio of over £60,000 for high-income families at the same point in time.

With households on a lower income naturally having less left after paying all of their bills and for other essentials, it can be very difficult for them to put money away regularly too, which means they don’t have much of a safety net if an unexpected bill or expense crops up.UK Spending graphic

How does all of this average spending compare to your household’s outgoings? Let us know on Facebook or via Twitter.

*End of the financial year 2015-2016

Sources:

https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/expenditure/bulletins/familyspendingintheuk/financialyearendingmarch2016#

https://www.gov.uk/government/statistics/households-below-average-income-199495-to-201516

https://www.theguardian.com/society/2017/feb/20/one-in-four-uk-families-have-less-than-95-in-savings-report-finds