Average weekly household spending climbed to £572.60 in 2018, the highest level since 2005. But statistics from the Office for National Statistics reveal that families had to borrow more or use up savings to fuel the spending increase.
The 13 year high was £18.40 more than a year earlier, but spending in certain categories decreased.
The biggest expenditure for families was on transport. Families spent an average of £80.80 per week on getting around, which represents 14% of their total expenditure.
The next highest cost was on housing, fuel and power at £76.10 spent per week, followed by £74.60 spent on recreation and culture.
The report also found that households’ saving ratio was at its lowest point since records began in 1957, at just 3.9%.
Households were net borrowers in all quarters of 2018, meaning that they had to borrow or draw on savings to pay for the increased spending.
Umbrella Insolvency’s Licensed Insolvency Practitioner Tom Fox said: “More consumers are turning to credit cards, loans and other forms of borrowing to cover everyday living expenses.
“Cuts in benefits and limited wage growth have reduced incomes at the same time as some basic costs have risen. The situation could get worse before it gets better. The head of the Bank of England has warned, for example, that food costs could rise by 10% following a disorderly Brexit.”
While the headline figures have increased, the data also reveals that families are spending less on dining out and clothes than they were 12 months earlier.
When adjusted for inflation, household spending on alcohol was less in 2018 (£8) than it was 10 years ago (£10.80).
Digging a little deeper into the data, there are marked spending differences in different age groups and in different regions.
Household headed by someone aged 30 or under spent 60% of their housing expenditure on rent, while households aged 50 to 74 years, spent more housing expenditure on alterations and improvements. Under 30s were also most likely to spend on takeaway meals.
Average family spending was highest in London (£658.30) and the South East (£657.50). The region with the lowest average expenditure was the North East of England, where families spent more than £200 less per week than families in London (£457.50).
Licensed Insolvency Practitioner Tom Fox said: “If everyday spending is pushing you deeper into the red each month, there are options to help you reach a sustainable, debt-free future. The best thing you can do is speak to a professional adviser sooner rather than later.”
For personal debt advice speak confidentially to a member of the team today. Call: 0800 611 8888.