Household bills double over last 50 years

Jan 29 2008 by Madeleine Brindley, Western Mail

ALMOST a fifth of our weekly household spending now goes towards household bills – more than double the equivalent amount from the 1950s.

The change, revealed in new figures released today by the Office for National Statistics, reflects recent house price, interest rate and domestic fuel price rises.

And the new data also reveals that our spending on food and clothing has almost halved in the 50 years that such statistics have been collected.

Such large changes in the way we spend our money is a stark reflection on how life has changed since the post-war years, particularly the rise and the ongoing dominance of the large supermarkets and the advent of cheap clothing stores selling throwaway fashion.

The latest ONS household expenditure statistics for 2006, which were published yesterday, reveal that spending on housing- related costs has risen by more than £15 per week over the past two years alone.

It hit £143 per household per week in 2006 compared with £127.40 in 2004 – the figure includes mortgage capital repayments, council tax and the cost of selling and buying a home.

They are now the single largest household outgoing, accounting for 19% of average weekly expenditure, compared with just 9% in 1957.

Debt experts have warned that the astronomical rise in house prices, which has seen people take out ever greater mortgages, which have, in turn, been affected by a series of interest rate increases, is contributing to debt problems.

Fran Targett, director of Citizens Advice Cymru, said, “We are finding that of the people who are coming to us with debt problems, a very high proportion of that debt is on basic costs – basic living and housing costs are a large part of that rather than spending on luxuries.

“The difficulties faced by someone with this debt is not simply repaying the money but it could potentially lead to homelessness, which is an enormous problem to have hanging over a person or family.

“We have not yet seen the full impact of interest rate rises on housing debt, although there has been an increase in people coming to see us.

“Fuel poverty has also caused huge problems in Wales and, given the current rises and talk of future rises in fuel costs, we also expect to see an increase in the number of people coming to see us because of financial difficulties.”

The ONS statistics also reveal that spending on food and non-alcoholic drink has dropped sharply from 33% of weekly household expenditure 50 years ago to just 15% – which may be attributable to the wider availability of cheaper food in supermarkets.

And the supermarkets’ diversification into clothing and other non-food products coupled with the emergence of cut-price fashion stores on the high street may account for why spending on clothing and footwear has fallen from 10% of weekly expenditure in 1957 to 5% in 2006.

Rhys Evans, acting director of the Welsh Consumer Council, said, “You would expect most of this is down to the influence of the supermarkets who buy in bulk and negotiate beneficial deals with suppliers, which has managed to bring prices down.

“It is surprising as people would traditionally have bought their weekly groceries from local shops, who in turn bought from local producers which meant that the supply chain was shorter and cost less. If everything else was going down in comparison then this would represent good value for the consumer but as mortgages, petrol and energy prices go up, I don’t think that anyone feels that they have more money in their pockets because that money is going elsewhere.”

The comparatively larger disposable incomes enjoyed by households in the 21st century has seen spending on leisure goods and services increase dramatically – it now accounts for 19% of weekly spending compared with 9% in 1957.

The ONS Family Spending 2007 report said, “Expenditure on leisure remained fairly stable until 1977. From 1977 until 2006 the expenditure has increased at a greater rate than in the 20 years between 1957 and 1977.”

Package holidays, money spent abroad and eating out all feature in the top 10 of weekly expenditure for 2006 – in 1957 only meals away from home made the top 10.

Spending on motoring and travel costs has also risen from 8% to 16% over the same period, while spending on alcoholic drinks has remained unchanged at 3% of the average weekly household budget.

The ONS report added, “Our pattern of expenditure has changed over the last 50 years.

“In 1957, food and non-alcoholic drinks accounted for the highest proportion of our average weekly household expenditure.”

59% have internet 59% have internet

More than three quarters of all households own a car or van – 32% own two or more vehicles.

More than three quarters of all households own a car or van – 32% own two or more vehicles.

But in the lowest income group, just 31% owned at least one car or van, compared with 94% of households in the highest group.

The ONS statistics also reveal that households in the highest income groups are more likely to have a home computer and an internet connection than those in lower income groups.

On average, 67% of UK households owned a home computer and 59% had an internet connection.

In the highest income group these figures were 96% and 94% respectively, compared to 31% and 21% in the lowest groups.

The proportion of households with a satellite, digital or cable receiver has increased from 65% to 71% between 2005-06 and 2006, and from 28% in 1998-99.

Again those households in the highest income are more likely to have a satellite receiver.

Eight out of 10 households with children had a satellite, digital or cable receiver, compared with just 66% without children.