The average UK home will spend an eye-watering £713,232 on the cost of living over a lifetime, according to a new analysis by uSwitch.com.
- The average household will spend £713,232 on essential bills and living expenses over the course of a lifetime
- The most significant expenses are transport (£164,736), followed by recreation and culture (£149,526)
- The average household will spend a staggering £62,010 on energy – equivalent to almost double the average pension pot (£36,600) or double the amount of the average house deposit (£31,000)
- Consumers could save £10,260 on energy over a lifetime or £228 a year by switching to a more competitive tariff.
Analysis by uSwitch.com, the independent price comparison and switching service, reveals the average UK household will spend a staggering £713,232 on bills and living expenses over a lifetime.
The most significant household expenditure is transport at £164,736 – almost as much as the average UK house price (£186,741). Food and non-alcoholic drink spend amounts to £137,592, while communication costs stand at £33,930.
Households will spend more than £60,000 on energy over a lifetime. This breaks down as £26.50 a week, or £1,378 a year for the average household. The total is equivalent to almost double the average pension pot (£36,600) or double the amount of the average house deposit (£31,000).
Consumers could reduce their spending on energy by £228 a year by switching to a different energy provider – leaving them a staggering £10,260 better off over the course of a lifetime. This saving could pay for a year at university including tuition fees, travel, books and equipment (£10,133). Despite the scale of these savings, almost two-thirds (62%) of consumers have never switched.
Over a third (37%) said they would use an annual £228 saving towards a rainy day fund, while 23% would pay off their debts. A fifth of consumers (21%) would put it towards the cost of a holiday, and eight per cent would treat themselves to new clothes or a gadget.
Consumers are most likely to put a saving of £4.38 per week away in savings (50%) – although ten per cent would buy a lottery ticket and six per cent would buy a morning coffee.
|Household expenditure over a lifetime|
|Household spending||Average amount per household per week||Per year||Per lifetime|
|Recreation and culture||£63.90||£3,322.80||£149,526|
|Food and non-alcoholic drinks||£58.80||£3,057.60||£137,592|
|Household goods & services||£33.10||£1,721.20||£77,454|
|Fuel and energy||£26.50||£1,378||£62,010|
|Clothing and footwear||£22.60||£1,175.20||£52,884|
Source: uSwitch calculation based on ONS data
Tom Lyon, energy expert at uSwitch.com, says: “These striking figures clearly show the massive pressures on household budgets to keep up with the cost of living. We are now spending double the amount of the average house deposit on our energy bills during a lifetime, yet consumers could easily save £10,000 by switching to a better deal.
“The New Year is a great opportunity to start afresh and make some resolutions to start saving precious pounds. The introduction of faster energy switching means that changing energy supplier is quicker and easier than ever before, so now is the ideal time to make sure you’re on the best deal.”
Notes to editors
- Figures on average amount per household per week sourced from the ONS Family Spending Report 2013 edition (see table above). Essential spending have been selected for the cost of living.
- Calculations of average spend – figures per week sourced from the ONS Family Spending report
- Amount per week (sourced from ONS Family Spending Report) x 52 weeks per year = year costs
- Year costs x 45 years of paying bills = cost in a lifetime
- Years of paying bills is assumed the years of a working life is 20-65 years – figures sourced from the government pensions website.
- ABI’s retirement income statistics Q3 2014 https://www.abi.org.uk/News/News-releases/2014/11/ABI-retirement-income-statistics-Q3-2014 – average pension pot = £36,600
- Halifax report http://www.theguardian.com/business/2014/jan/04/housing-bubble-fears-price-surge-london-manchester – average deposit = £31,000
- Figure sourced from uSwitch.com based on customer data. If you can save on average £228 (uSwitch figure) on energy bills a year that could equate to £10,260 over a working lifetime – this is made on the assumption that consumers would pay £228 less each year compared to a more expensive tariff. £228 per year x 45 years = £10,260. Assuming that you use the money you have spent on energy towards something else. Weekly saving on energy bills is £4.39 per week. £228 per year / 52 weeks = £4.38
- Lloyds Banking Group regional housing price http://www.lloydsbankinggroup.com/media/economic-insight/regional-house-prices/
- NUS http://www.nus.org.uk/en/advicehttps://www.uswitch.com/banking/-and-funding/average-costs-of-living-and-study/ – pay for a year at university including tuition fees, travel, books and equipment (£10,133)
- Ofgem ‘State of Market Assessment’ March 2014 https://www.ofgem.gov.uk/ofgem-publications/86804/assessmentdocumentpublished.pdf
- Research conducted by Censuswide December 2014, amongst 1,000 UK adults (aged 18+). ‘If you had an extra £228 per year, out of the following what would you do with it? (Please select the most likely scenario)’
|Save the money for a rainy day – e.g. pension, savings account||36.90%|
|Pay off my debts||22.80%|
|Put towards a holiday||20.70%|
|None of the above||6.40%|
|Treat myself to new clothes||5.10%|
|Put the money towards more socialising – e.g. eating out, drinks with friends||4.70%|
|Treat myself to a new gadget(s)||3.40%|
- Research conducted by Censuswide December 2014, amongst 1,000 UK adults (aged 18+). If you had an extra £4.38 a week, out of the following what would you do with it?’
|Save the money||49.30%|
|None of the above||20.10%|
|Buy a lottery ticket(s)||9.90%|
|Buy a morning coffee||6.40%|
|Select more expensive brand items in weekly grocery shop||6.40%|
|Buy lunch rather than bring it in from home||4.70%|
|Buy a magazine||3.30%|