The average British family spends four times more of their budget covering monthly mortgage repayments and running the family home than fifty years ago, according to a milestone report published today by the Office of National Statistics (ONS).
The 'Family Spending' study, which examines fifty years of the nation’s financial habits, ranging from food and housing budgets to transport and leisure costs, has revealed that while mortgage
payments eat up the majority of our monthly budgets, we spend a lot less on food that we used to.
The report is based on records from almost 7,000 homes and shows that the real-term spend has risen from £14.30 a week - £243 at modern values - to £456, with mortgage payments costing the average homebuyer £132 a week or £174 for Londoners. What’s more, fuel bills
have also now overtaken food in household budgets.
In 2006 energy bills for an average home cost £48, but with the recent price hikes from the gas and electricity providers, this is now expected to rise by another 15 per cent.
Over the period since the survey was started, spending habits have changed dramatically as has the amount of time dedicated to home-making. A rather generous 19 per cent of our current spend goes on items such as soft furnishings, carpets, cushions, garden furniture and ornaments, compared to just nine per cent back in 1957.
Unsurprisingly, council tax now rates as the fourth highest item of expenditure on the family budget compared to the 1950s when rates were a lot lower and certainly didn't make the top 50 items of the family budget.
One particular sign of the times is the decline in the number of landlines in UK homes which has seen its first dip in the last 50 years as mobile phones
become ingrained in everyday life. In the late Nineties, about 19 out of 20 homes had a phone but by 2006 it was nine out of ten while eight out of ten people had a mobile.
However, despite the increases in spending, the UK has also become a nation of savers. According to a separate report by NS&I's (National Savings and Investments) the British have increased their savings 39 fold in real terms since the early 60s and 31 per cent since 2000.
The Century of Saving report also predicts that the savings ratio will rise significantly in the years ahead, though it could be 50 years before the majority of Brits become regular savers.
Dax Harkins, NS&I's senior savings strategist explains: "Advances in technology, over the last half century such as telephone and internet banking
, have made it easier for savers. We expect future developments will play a part in boosting the future savings ratio by making new products possible and allowing new ways to access them using convergence products such as the Apple iPhone
"However, simple measures can still prove the most effective. Setting up a standing order to make an automatic savings contribution just after pay-day is one of the most effective ways to ensure that saving becomes a lifetime habit."
© Fair Investment Company Ltd