UK households increased their weekly spending to an average of £623.30 in the year to March 2024 according to official figures though wide disparities remain between the richest and poorest families.

The latest data from the Office for National Statistics (ONS) show expenditure climbed by £55.60, or 10%, compared with the previous year.

After adjusting for inflation, the rise equates to a 3% increase in real terms, with households spending £15.40 more each week.

Spending among the richest fifth of households averaged £948.70 a week, more than double the £378.60 recorded by the poorest fifth, underscoring the persistent gulf in living standards across the income scale.

SHIFTING SPENDING

Households’ allocation of spending has also shifted. Restaurants and hotels accounted for 7% of outgoings, still below the 9% recorded before the coronavirus pandemic in 2020.

All other categories of spending, measured under the international classification of individual consumption by purpose (COICOP), have returned to pre-pandemic levels.

Energy costs remained a significant pressure point, though the latest figures suggest some easing compared with the peak of the crisis.

Weekly expenditure on electricity, gas and other fuels rose in real terms by £5.10, a 15% increase on the year, but was still £3.50 lower than in 2022, when wholesale price surges first pushed household bills sharply higher.

UNDER PRESSURE

Lorna Shah, managing director, retail retirement at L&G, said: “For people of retirement age, there has been an 12% increase from £248 a week to £2782. This underlines that many retirees are having to manage their spending extremely tightly.

“According to L&G’s research with the world-leading Happiness Research Institute think tank one in five retirees (22%) live on less than £1,000 a month. And only 38% of retirees enjoy an income of £1,700 or more, the average monthly income of the happiest retirees. With household costs climbing, it’s understandable that many retirees feel the pressure.”

PUSHES UP RENT

And Megan Eighteen, President of ARLA Propertymark, added: “As household expenses rise due to increased costs of essentials like energy and food, primarily driven by global conflict, supply chain issues, and previous high inflation rates, families are facing greater financial pressure.

“This situation is compounded by rising rents and mortgage costs, with landlords also affected by tax hikes and regulatory challenges over the years.

“As a result, many landlords have been forced to pass on some of these costs to tenants or exit the market entirely, further worsening the gap in supply and demand in the private rented sector, which also pushes up rent levels.”