The average cost of running a household over the course of a lifetime in the UK is more than £1.8 million, according to new analysis by Prudential of the ONS Family Spending Report.
The reports suggests an average of £29,000 is spent each year but this figure can vary greatly between age groups, with the cost of raising children having a major impact on those aged in their 30s and 40s.
According to the analysis, annual costs peak at around £45,000 when the main breadwinner is aged between 30 and 49 and their children are of school age.
In comparison, the household expenditure of those aged between 65 and 74 is only £25,000 a year, while average outlay for those aged 75 and over is just £17,000.
Expenses and priorities
The report shows that housing is now the single largest expense for the average UK household, with factors such as mortgages, rent, energy bills, council tax and repairs costing a total of £508,000 over the course of a lifetime.
Overall, the second largest expense was found to be recreation and culture, totalling £230,000, which suggests people are still unwilling to compromise their quality of life.
Further analysis highlighted how state provision affects the way in which households spend their money over the course of a lifetime, with many of these services accounting for some of the least expensive lifetime costs.
The data showed that the average UK household spends just £343 on healthcare, which is far lower than many of the UK’s global neighbours, while education only costs £364 a year – a combined total of £44,000 over the course of a lifetime.
Commenting on the data, Vince Smith-Hughes, retirement expert at Prudential, said it is clear that many people could save money on non-essentials during their life and put the savings toward their later years.
“Our analysis shows that the average household spends £230,000 on recreation and £128,000 on hotels over the course of a lifetime, so by tightening their belts a little people could afford to save more towards retirement,” he explained.
“Saving as much money as possible from early in working life is key to being able to supplement the State Pension and ensure sufficient income to live a comfortable retirement.” Mr Smith-Hughes concluded.