The Changing Face of Household Outgoings
Food costs are said to be rising quickly, but appears there has been a marked decrease in household spending on food over the past half century, according to the Office of National Statistics (ONS).
The 50th anniversary of the ONS Family Expenditure Survey saw the changes over half a century, with housing costs now replacing food as the biggest spend per household. Another big climber was how much each family now spends on transport.
Back in 1957 the total household spend on food accounted for a third (33%) of monthly outgoings, far surpassing any figure that households now spend their income in one particular area. Growing affluence, development of supermarkets and the role of cheaper transportation and storage have all helped to cut prices on food over the past half century, and now total food bills account for an average of 15% of all household outgoings.
Housing costs, however, have either soared, or people are more willing to spend more money on their house, as there was a growth of 10% of outgoings spent on housing, from 9% in 1957 to 19% in 2007. Nowadays house prices have risen substantially, with the average price of a house outweighing the average salary by eight times. It is no wonder then that people are now spending more on their mortgages than ever. Meanwhile, releasing value in your home is increasingly becoming a valued practise for raising money. Research by Mintel has said that 50% of secured loans are taken out for home improvements.
Another substantial gain in spending over the last fifty years has been in transport costs. With more people prepared to travel further for work, and the availability of cars, it’s little surprise to see that spending on this area has doubled to 16% in 2006. Some form of commuting has become regularity for most of the country, with the percentage of people commuting more than 50km increasing by 30% between 1991 and 2001. Additionally, annual commuting is now thought to cost around £850 per year for Londoners, although it is substantially less elsewhere.
Think carefully before securing other debts against your home, your home may be repossessed if you do not keep up repayments on your mortgage.
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