According to a recent survey, Brits are spending less on alcohol and tobacco, and more on restaurants and hotels. The annual Family Spending Survey carried out by the Office for National Statistics (ONS), asked 5,000 families to document their weekly spending for two weeks. UK based short term loan provider, Mr Lender, explores how UK spending habits have changed over the last few years.
The report released by the ONS shows the average UK household spent £529 per week, excluding interest on mortgage payments. It also revealed the average household spent £8 per week on alcohol, while spending on housing, clothing, communication, and recreation and culture has risen higher than before the 2008 financial crisis.
Cigarettes and alcohol
Weekly spending on alcohol, tobacco and narcotics fell below £12 for the first time in 15 years. Average weekly spend on alcohol in Scotland was £8.90, while for the rest of the UK it was £7.80. Weekly spend on tobacco was on average £2.90 in England, £3 in Wales, £4.90 in Scotland, and £6.60 in Northern Ireland. The survey also showed households spent an average of £45 per week on restaurants and hotels. The ONS say this is due to high employment rates and rising disposable income.
Chef Jacob Kenedy said “we have one of the best restaurant scenes in London and that is helping to drive our cuisine nationally. Eating out is becoming part of life, it’s not just for special occasions. If we are able to invest more of our income into living well – whether that be living more healthily or enjoying life more – then it’s a good thing.”
Average weekly spending was highest in London, at £652.40. The North East was the lowest at £423.50. This is reportedly due to the difference in housing costs.
Toby Clark, Director of Research for Europe at market research company, Mintel, said “there is a limit to the amount of stuff people can accumulate. People are spending money on experiences – holidays, seeing new exotic places, going to music festivals, eating out – rather than accumulating more things.”
Changing attitudes to technology
The report also shows the UK now depends on technology more than they have done in previous years. The number of UK households who owned a mobile phone 20 years ago was just 16%. In 2016 this figure reached 95%. The ONS say “to put this into context, 95% of UK households also have central heating, suggesting that communication devices such as mobile phones are now viewed as a necessity.”
While spending on tobacco and alcohol has decreased compared to the year before, average weekly spending hasn’t changed very much at all. This is because certain areas have seen a rise, such as spending on restaurants and hotels. Jo Bulman, ONS Statistician, said “while overall household spending didn’t change much in real terms since the previous year, we did see some interesting shifts in the types of things people are spending their money on.”
The difference in weekly spending for higher and lower income families
The report showed average weekly spending depended on different parts of the country, but it also varied greatly between higher and lower income families. Statistics show the richest 10% of the UK spend an average of £9 per week on wine and £107.10 per week on restaurants and hotels , while the poorest 10% spent £7.30 on water bills and £44.50 per week on housing, fuel and power.
Executive Director of the Equality Trust, Dr Wanda Wyporska, said there were misconceptions about how the poorest 10% spent their money. She said low income families have to make a difficult decision about how they spend their money. Wyporska said “there’s a gargantuan gap in spending between the richest and poorest households because there is such huge inequality in our society.
“We often hear the poor criticised for being wasteful, that’s a hard argument to make when the richest are spending more on their pets than the poorest are on clothing their families. We know millions are in danger of falling into debt and poverty. It’s about time the government addressed the urgent need to reduce inequality and poverty, and support those who are clearly in dire need.”
It has recently been reported that the UK inflation rate is rising faster than average wages. This is partially due to a rise in consumer spending. As inflation continues to rise, and the Bank of England keep interest rates low – UK households are likely to adjust their spending habits to handle the rising cost of living.