FINANCE
- Hitachi Personal Finance analyses new data that shows that household expenditure at its highest in a decade
- The UK’s average weekly income has shown no growth in the past year [3], while household expenditure grew by 3.9% [1]
- Clothing and footwear saw the biggest rise in expenditure over the previous ten years (25%) [2]
With a new income report released by the ONS this week, new supporting analysis from personal loan provider,Hitachi Personal Finance, reveals that average weekly income is continuing to fall short of expenditure, which has seen continuous growth for the previous three years.
The data shows that at the end of 2017, household expenditure was 3.9% higher than the previous year, meaning British residents had gone from spending £533 per week in 2016, to £554 per week in 2017 on their everyday needs, from rent and bills, to food and clothing [1]. This is the biggest increase in the cost of household expenditure in ten years.
Analysis also showed that the individual average weekly expenditure in 2017 was 3.4% higher than 2016’s figures (£226.20 a week compared to £233.80), a difference of £7.60. Again, this is the biggest increase in the past decade.
The UK’s average weekly household expenditure has continually increased since 2014 and has seen a 1.4% overall increase in the last ten years, from spending £230.50 in 2007, to £233.80 in 2017.
However, Hitachi revealed that average weekly income has remained stagnant, or even decreased, every month since December 2016. What’s more, the average weekly income in March 2008 was at £503, with new figures released this week showing a 2.8% drop to £489 per week.
Hitachi’s ‘History of Household Expenditure’ analysis compared the nation’s spending habits, versus trends in income. The figures showed that average weekly income showed no movement in March 2016 compared to March 2017, which has continued into 2018 with Average Weekly Earnings in March remaining at £489.
The categories that have seen the largest increase in expenditure over the previous decade are clothing and footwear, increasing by 27% from £19.80 – £25.10, along with recreation and culture, which has seen a 22% increase from £60.20 – £73.50 per week.
However, the nation hasn’t been splashing the cash in every department, with education (-61%) and alcoholic drinks and tobacco (-30%) seeing a significant drop in expenditure.
The top five growth areas for household expenditure since 2007 are:
- Clothing and footwear – 27% increase
- Recreation and culture – 22% increase
- Communication – 18% increase
- Household Goods and Services – 8% increase
- Miscellaneous goods and services (personal care and products, accessories, childcare products and services) – 2% increase
Vincent Reboul, Managing Director at Hitachi Personal Finance, commented: “We wanted to carry out this analysis to get a holistic view of what consumer spending looks like across the UK, compared to income, and how this has changed over the previous decade. We’ve published the full findings of the report on our website, which uses ONS insight alongside our own data, so that people can see where the main areas of growth are in consumer spending, along with advice on how to cut spending in these categories.
“Naturally we expect to see growth in expenditure as costs rise, however our insight shows us that it is the leisure markets that are driving the biggest growth, with clothing and footwear, communication, and recreation and culture seeing the most significant growth since 2007. This points towards consumer confidence despite the low levels of income growth. With that said, it will be interesting to see how income levels in the coming months weigh up against expenditure, as we would hope to see the disparity between the two lessen in time.”
