Appendix B provides further detailed information regarding the methodology of the Living Costs and Food survey, used to produce the estimates presented in Family Spending.
A household expenditure survey has been conducted each year in the UK since 1957. From 1957 to March 2001 the Family Expenditure Survey (FES) and National Food Survey (NFS) provided information on household expenditure patterns and food consumption. In April 2001 these surveys were combined to form the Expenditure and Food Survey (EFS).
In 2008 selected Government household surveys, on which the Office for National Statistics (ONS) leads, were combined into one Integrated Household Survey (IHS). In anticipation of this, the EFS moved to a calendar-year basis in January 2006. The EFS questionnaire became known as the Living Costs and Food (LCF) module of the IHS in 2008, to accommodate the insertion of a core set of IHS questions.
More information about the IHS can be found on the National Statistics website. In summary, the survey design allows for the collection of common core data across the pooled samples of the constituent surveys, achieving the biggest pool of UK social data after the Census. The large sample allows a detailed level of analysis to be conducted, and allows results to be reported for smaller geographic areas. The IHS has become the key vehicle for high-profile national data collection initiatives including questions on subjective well-being, and on sexual identity.
The LCF is a voluntary sample survey of private households. The basic unit of the survey is the household. A household comprises one person living alone or a group of people (not necessarily related living at the same address) who share cooking facilities AND share a living room or sitting room or dining area (See ‘Definitions’).
Each individual aged 16 and over in the household visited is asked to keep diary records of daily expenditure for two weeks. Information about regular expenditure, such as rent and mortgage payments, is obtained from a household interview along with retrospective information on certain large, infrequent expenditures such as those on vehicles. Children aged 7 to 15 are asked to keep a simplified version of the diary.
Detailed questions are asked about the income of each adult member of the household. In addition, personal information such as age, sex and marital status is recorded for each household member. A copy of the LCF questionnaire is available from the Economic and Social Data Service.
The survey is continuous, interviews being spread evenly over the year to ensure that seasonal effects are covered. The questionnaire content is reviewed thoroughly to ensure that it is up-to-date and captures information efficiently. Some changes reflect new forms of expenditure or new sources of income, especially benefits. Others are the result of new requirements by the survey’s users. (See the section on ‘Survey Improvements’ for more information.)
The LCF sample for Great Britain is a multi-stage stratified random sample with clustering. It is drawn from the Small Users file of the Postcode Address File (PAF) – the Post Office’s list of addresses. All Scottish offshore islands and the Isles of Scilly are excluded from the sample because of excessive interview travel costs. Postal sectors are the primary sample unit. 638 postal sectors are randomly selected after being arranged in strata defined by regions (sub-divided into metropolitan and non-metropolitan areas) and two 2001 Census variables: socio-economic group of the head of household and ownership of cars. These census variables were new stratifiers originally introduced for the 1996/97 survey, and updated following the results of the 2001 Census. The results of the 2011 Census will be used in due course. The Northern Ireland sample is drawn as a random sample of addresses from the Land and Property Services Agency list.
A total of 11,484 households were selected in 2011 for the LCF in Great Britain. However, it is not possible to get full response. A small number of households cannot be contacted at all, and in other households one or more members decline to co-operate. 5,293 households in Great Britain co-operated fully in the survey in 2011; that is, they answered the household questionnaire and all adults in the household answered the full income questionnaire and kept the expenditure diary. A further 238 households provided sufficient information to be included as valid responses. The overall response rate for the 2011 LCF was 54 per cent in Great Britain, an increase from 50 per cent in 2010.
Details of response are shown in the following table.
|No of households or addresses||Percentage of effective sample|
|ii.||Ineligible addresses: businesses,|
|institutions, empty, demolished/derelict||1,183||-|
|iii.||Extra households (multi-household addresses)||2||-|
|iv.||Total eligible (that is i less ii, plus iii)||10,303||100|
|v.||Co-operating households (which includes 238 partials)||5,531||53.7|
|vii.||Households at which no contact could be obtained||1,182||11.5|
In the Northern Ireland survey, the eligible sample was 261 households. The number of co-operating households who provided usable data was 161, giving a response rate of 62 per cent. This represents an increase of 2 percentage points from the 2010 survey year.
Northern Ireland was over-sampled in the years 1997/98 to 2009 in order to provide a large enough sample for some separate analysis. This boost to the Northern Ireland sample was discontinued in 2010.
Three types of partial response are accepted on the LCF:
All adults complete the full income section of the interview, but one or more adults in the household refuse to keep the diary.
All adults in the household keep the diary, but one or more adults provides only partial income information.
One or more adults refuse to keep the diary and one or more adults provide only partial income information.
All partial responses must contain a diary from the Main Diary Keeper (MDK), who is the person who does most of the shopping in the household. If the MDK refuses to complete the diary the household is classified as a refusal.
In 2011 partial responses accounted for 4.3 per cent (238 households) of all co-operating households. Of these partials, the majority (98 per cent) occurred because one or more adults in the household refused to keep the diary. Partial income information was provided in 2 per cent of cases.
|Type of partial response||Number of households||Percentage of partials|
|1.||One or more adults refuse to keep the diary1||233||98|
|2.||One or more adults provide only partial income information||5||2|
Response rates to household surveys have generally been declining in recent years. In 2011 the LCF’s response rate for Great Britain was 54 per cent (see ‘Response to the survey’ for a detailed breakdown), compared with around 59 per cent in 2000/01. Response in 2011 was higher than in 2010, when 50 percent was achieved. It should be noted that the LCF requires satisfactory completion of both the household questionnaire and diary (see ‘Eligible response’ for more information).
|Year||Response Rate Percentage|
Response rates are sometimes used as an indicator of a survey’s quality and how representative a sample is of the target population. It is generally assumed that the lower the response rates the greater the likelihood of bias in the results. This is because the characteristics of non-responding households may differ from those of responding households causing certain types of households to be under-represented in the sample. Analysis of the UK Labour Force Survey (LFS) tentatively reported an effect for some variables; a separate study1 for the LCF found that weekly variation in the number of LCF cases achieved did not result in different expenditure patterns being reported. Overall, there is little evidence to suggest that a limited drop in response will affect bias to a large degree. Nevertheless, to maintain quality of the data, methods such as proxy and partial interviews are set in place to minimise non-response for the LCF. A pilot using higher incentives was run to explore potential increases in response rates. Following the results of this pilot it was decided to continue with the existing payment, as the cost of increasing this incentive outweighed the benefit gained from a small increase in response.
Currently, non-responders are accounted for in the weighting process for LCF data, which compensates for non-responders recognised from analysis of the 2001 Census (see ‘Weighting’ for more information). At present, the LCF is contributing towards the 2011 Census non-response linkage project, which will enable non-response weights to be updated.
Lower response also potentially impacts on precision, with fewer cases being completed. However, considering the years from 2007 (when the current set sample size was adopted for Great Britain), percentage standard errors at COICOP level have not changed measurably (
Table A1 (186 Kb Excel sheet)
for 2011 standard errors).
For users to fully utilise LCF data in an informed way, sample sizes and response rates must be considered. Therefore, sample sizes are provided within each table of Family Spending, and small sample sizes are highlighted for users’ attention. Where necessary, tables with detailed breakdowns are averaged across three years to overcome issues of accuracy and disclosure.
The fieldwork is conducted by the Office for National Statistics (ONS) in Great Britain and by the Northern Ireland Statistics and Research Agency (NISRA) of the Department of Finance and Personnel in Northern Ireland using almost identical questionnaires. Households at the selected addresses are visited and asked to co-operate in the survey. In order to maximise response, interviewers make at least four separate calls, and sometimes many more, at different times of day on households which are difficult to contact. Interviews are conducted by Computer Assisted Personal Interviewing (CAPI) using laptop computers. During the interview information is collected about the household; certain regular payments such as rent, gas, electricity and telephone accounts; expenditure on certain large items (for example vehicle purchases over the previous 12 months); and income. Each individual aged 16 and over in the household is asked to keep a detailed record of expenditure every day for two weeks. Children aged between 7 and 15 are also asked to keep a simplified diary of daily expenditure. In 2011 a total of 1,525 children aged between 7 and 15 in responding households in the UK were asked to complete expenditure diaries; 305, or 20 per cent, did not do so. This number includes both refusals and children who had no expenditure during the two weeks. Information provided by all members of the household is kept strictly confidential. Each person aged 16 and over in the household who keeps a diary (and whose income information is collected) is subsequently paid £10 as a token of appreciation. Children who keep a diary are given a £5 payment.
In the last two months of the 1998/99 survey, as an experiment, a small book of postage stamps was enclosed with the introductory letter sent to every address. Response seemed to increase as a result of this experiment and it has become a permanent feature of the survey. It is difficult to quantify the exact effect on response but the cognitive work that was carried out as part of the EFS development indicated that it was having a positive effect.
Some survey cases are reissued if a response is not obtained, that is, the cases are reallocated to field interviewers at a later date to attempt to achieve a response. Criteria are applied to determine which cases should be reissued. Until 2010 there was a strict reissue criterion that restricted the number of cases that could be reissued. In 2010 this was changed to include cases where the interviewer was ‘not sure’ whether it was worth reissuing the case. It is then left to field staff at headquarters to assess whether or not to reissue. Previously the only cases reissued were those where the interviewer reported that the household had expressed an interest in participating or would be likely to participate.
In 2011 some 989 addresses were reissued, of which 113 were converted into responding households. This increased the overall response rate by 1.1 percentage points.
Under LCF rules, a refusal by just one person to respond to the income section of the questionnaire invalidates the response of the whole household. Similarly, a refusal by the household’s main shopper to complete the two-week expenditure diary also results in an invalid response.
Questions about general household affairs are put to all household members or to the household representative person (HRP), and questions about work and income are put to the individual members of the household. Where a member of the household is not present during the household interview, another member of the household (for example a spouse) may be able to provide information about the absent person. The individual’s interview is then identified as a proxy interview. Under LCF rules, the expenditure diary cannot be completed by proxy; if a household member is not present during the diary period they are classified as an absent spender.
In 2001/02 the EFS began including households that contained a proxy interview. In that year, 12 per cent of all responding households contained at least one proxy interview. In 2011 the percentage of fully responding households with a proxy interview was 24 per cent. The rise in the percentage of proxy interviews over time reflects general response trends for social surveys; interviewers are finding it increasingly difficult to make initial contact with households and to secure interviews with each household member.
|Percentage of households|
|Total number of households||6,432||6,265||6,258||6,059||5,545||5,271||5,222||5,116||5,531|
Analysis of the 2011 data revealed that the inclusion of proxy interviews increased response from above average income households. For the 2011 survey, the average gross normal weekly household income was 15 per cent higher than it would have been if proxy interviews had not been accepted. Similar findings were obtained with respect to expenditure: total spending was 12 per cent higher than if proxy interviews had not been included. Use of proxies enhances the sample size and hence the precision of the figures obtained. It also enables the survey to capture the income and expenditure from (on average) higher-earning households and hence ensures that these households are represented fully in the survey. This must be weighed against the risk that the proxy interviews may not provide exactly the same information as direct interviews, but the available evidence suggests that including proxies provides higher data quality overall.
Great care is taken in collecting information from households, and comprehensive checks are applied during processing so that errors in recording and processing are minimised. The main factors that affect the reliability of the survey results are sampling variability, non-response bias and some incorrect reporting of certain items of expenditure and income. Measures of sampling variability are given alongside some results in this report and are discussed in detail in ‘Standard errors and estimates of precision’.
The households which decline to respond to the survey tend to differ in some respects from those that co-operate; it is therefore possible that their patterns of expenditure and income also differ. A comparison was made of the households responding in the 1991 FES with those not responding, based on information from the 1991 Census (A comparison of the Census characteristics of respondents and non-respondents to the 1991 FES by K Foster2, ONS Survey Methodology Bulletin No. 38, Jan 1996). Results from the study indicate that response was lower than average in Greater London, higher in non-metropolitan areas, and that non-response tended to increase with increasing age of the head of the household – up to age 65. Households that contained three or more adults, or where the head of the household was born outside the United Kingdom or was classified to an ethnic minority group, were also more likely than others to be non-responding. Non-response was also above average where the head of the household had no post-school qualifications, was self-employed, or was in a manual social class group. The data were re-weighted to compensate for the main non-response biases identified from the 1991 Census comparison, as described in ‘Weighting’. ONS has completed a similar comparative exercise with the 2001 Census data, which resulted in an update of the non-response weights for the estimates for 2007 onwards. Further analysis will be conducted using the results of the 2011 Census.
Checks are included in the computer assisted personal interviewing (CAPI) program, which are applied to the responses given during the interview. Other procedures are also in place to ensure that users are provided with high quality data. For example, quality control is carried out to ensure that any unusual values (outliers) are genuine, and checks are made on any unusual changes in average spending compared with the previous year.
When aspects of the survey change, rigorous tests are used to ensure the proposed changes are sensible and work both in the field and on the processing system. During 2010 a set of questions were developed to capture expenditure on combined communications packages, for example, where television, internet and telephone services are purchased from a single provider. These questions were developed following an expert review and cognitive testing conducted by the ONS Methodology directorate. These questions have been included in the 2011 questionnaire and feed into this 2012 edition of Family Spending.
The LCF is designed primarily as a survey of household expenditure on goods and services. It also gathers information about the income of household members, and is an important and detailed source of income data. However, it is not possible to draw up a balance sheet of income and expenditure either for individual households or groups of households.
The majority of expenditure information collected relates to the two-week period immediately following the interview, whereas income components can refer to a much longer period (the most recent 12 months). LCF income does not include withdrawal of savings; loans and money received in payment of loans; receipts from maturing insurance policies; proceeds from the sale of assets (such as a car); and winnings from betting or windfalls, such as legacies. Despite this, recorded expenditure might reflect these items, as well as the effects of living off savings, using capital, borrowing money or income – either recent or from a previous period.
Hence, there is no reason why income and expenditure should balance. In fact measured expenditure exceeds measured income at the bottom end of the income distribution. However, this difference cannot be regarded as a reliable measure of savings or dis-saving.
For further information of what is included in income on the LCF see income headings in ‘Definitions’.
Although LCF response is generally based on complete households responding, there are areas in the survey for which missing information is imputed (inferred, sometimes in conjunction with other sources). This falls into two broad categories: item imputation and diary imputation. Using a combination of reliable imputation procedures ensures that the LCF data provide a comprehensive picture of the spending patterns and income sources for each household.
Although LCF interviewers are trained to obtain full answers or best estimates for all questions, and encourage respondents to refer to up-to-date bills and statements, missing values in the questionnaire can sometimes occur when respondents are unable to provide an answer.
Missing data for questions in the expenditure and income parts of the questionnaire are imputed using the following procedures:
By reference to tables based on external (non-LCF) data published elsewhere. For example, rates and eligibility rules for state benefits; council tax rates for properties in different council tax bands; and the Annual Survey of Hours and Earnings (ASHE).
By reference to tables based on LCF data from previous years showing average amounts according to gross household income quintile. Expenditures imputed using this method include insurances, utilities, rent, personal pensions, and child income.
Using information collected elsewhere in the questionnaire. For example, missing tax and National Insurance payments can be imputed if a gross salary figure has been provided.
Respondents who have failed to answer important questions, such that the main streams of income and expenditure are not captured, are converted to refusals to ensure that a sufficiently high level of data accuracy is maintained.
Markers are included in the LCF datasets to record whether values at key expenditure and state benefit questions were imputed or amended; this gives a broad indication of the amount of imputation carried out for each individual case.
The LCF accepts households with missing diaries, as long as the diary of the Main Diary Keeper (MDK) is present. Diaries which are missing are imputed, that is they will receive the diary data from a person in another responding household with matching characteristics. Missing diaries for households in Great Britain and Northern Ireland are imputed from the pool of responding cases for the appropriate country.
The first step in the diary imputation process involves scoring each person in the pool of potential donors for suitability as a match for the person with a missing diary.
The scoring system is:
matching age = 8 points
matching relationship to the HRP = 4 points
matching employment status = 2 points
matching survey month = 1 point
In the next stage of the process the potential donor with the highest score is selected and the diary data from the donor is copied to the receiving person. To be used as a donor, a diary must achieve a minimum score of 8 points.
In 2011, 218 households had imputed diaries, accounting for 3.8 per cent of responding households.
Variables that indicate whether or not a diary has been imputed, and the number of diaries imputed per household, are included in the LCF datasets.
Retail Prices Index – The main reason, historically, for instituting a regular survey on expenditure by households has been to provide information on spending patterns for the Retail Prices Index ( RPI) and the Consumer Prices Index (CPI). From April 2011 the CPI rather than the RPI is used as basis for indexation of benefits, tax credit and state and public service pensions.
The RPI and CPI measure the change in the cost of a selection of goods and services (the ‘basket of goods’) representative of the expenditure of the vast majority of households. The pattern of expenditure gradually changes from one year to the next, and the composition of the basket of goods needs to be kept up-to-date. Accordingly, regular information is required on spending patterns and much of this is supplied by the LCF. The expenditure weights for the general RPI and CPI need to relate to people within given income limits, for which the LCF is the only source of information.
Household expenditure and Gross Domestic Product (GDP) – LCF data on spending are an important source used in compiling national estimates of household final consumption expenditure which are published regularly in United Kingdom National Accounts (ONS Blue Book). Household final consumption expenditure estimates feed into the National Accounts and estimates of GDP. They will also provide the weights for Purchasing Power Parities (PPPs) for international price comparisons. LCF data are also used in the estimation of taxes on expenditure, in particular VAT.
Regional accounts – LCF expenditure information is one of the sources used by ONS to derive regional estimates of consumption expenditure. It is also used in compiling some of the other estimates for the regional accounts.
The statistical office of the European Union (Eurostat) collates information from family budget surveys conducted by the member states. The LCF is the UK’s contribution to this important EU initiative to collect data on household expenditure from member countries.
Other government uses – The Department of Energy and Climate Change and the Department for Transport both use LCF expenditure data in their own fields relating to, for example, energy, housing, cars and transport.
Non-government uses – There are also numerous users outside central government, including academic researchers and business and market researchers. One example is an academic study that has used LCF data, as part of a wider study, to obtain a clear picture of utility expenditure patterns across the European Union.
Redistribution of income – LCF information on income and expenditure is used to study how government taxes and benefits affect household income. The Government’s interdepartmental tax benefit model is based on the LCF and enables the economic effects of policy measures to be analysed across households. This model is used by HM Treasury and HM Revenue and Customs to estimate the impact on different households of possible changes in taxes and benefits.
Non-government users – As with the expenditure data, LCF income data are also studied extensively outside government. In particular, academic researchers in the economic and social science areas of many universities use the LCF. For example the Institute for Fiscal Studies uses LCF data in research it carries out both for government and on its own account to inform public debate.
The Department for Environment, Food and Rural Affairs (Defra) publishes separate reports using LCF data on food expenditure to estimate consumption and nutrient intake. The Department for Transport uses LCF data to monitor and forecast levels of car ownership and use, and in studies on the effects of motoring taxes.
Note: Great care is taken to ensure complete confidentiality of information and to protect the identity of LCF households. Only anonymised data are supplied to users.
A useful comparison for LCF estimates is with Household Final Consumption Expenditure (HHFCE) figures published in Consumer Trends and used in the UK National Accounts.
This section compares estimates from the LCF with the estimates used in the UK National Accounts. The Household Final Consumption Expenditure estimates use a number of administrative and survey sources, of which the LCF survey is one. As a result differences occur in the estimates published, because of sources and concepts.
For example, conceptual differences can be found for housing expenditure. As explained in Chapter 2: Housing Expenditure, Family Spending only includes rental costs in the housing, fuel and power category, whilst mortgage costs are included in the other expenditure items category. In contrast, National Accounts housing data in the housing, fuel and power category includes a value for rentals paid by owner occupiers in order to maintain international comparability. This is a theoretical cost that home owners would have to pay to rent their own home. By international convention, mortgage costs are excluded from National Accounts Household Final Consumption Data.
According to Family Spending data, Housing, water, electricity, gas and other fuels was the category where the value of spending increased most over the time series. Despite the conceptual differences between the two outputs, National Accounts household expenditure estimates also show a large increase (46 per cent) in spending.
Both National Accounts and Chapter 4 of Family Spending provide estimates over time to remove the effects of inflation and to enable figures for different years to be compared on a like-for-like basis. The National Accounts figures adjusted for inflation are known as "volume measures". The volume measures of National Accounts show that Housing expenditure has remained relatively stable, while the prices of goods and services in this category have increased by 45 per cent between 2005 and 2011. Adjusted for inflation, Family Spending shows an increase in expenditure of 18 per cent over the same period (from £53.80 to £63.30).
A similar pattern can be seen in the Food and non-alcoholic drinks category in National Accounts data, showing a reduction in volume (7 per cent) and an increase in the monetary value of spending by around 25 per cent since 2005. This is broadly the same figure as reported by Family Spending, which notes a 21 per cent increase in spending on food since 2005. These figures indicate relatively little scope or willingness to cut back on these items, despite significant price rises in some goods and services and the recession of 2008/2009.
Estimates for Transport between the sources are comparable. Family Spending shows that transport spending at 2011 prices fell from £75.20 in 2005/06 to £65.70 in 2011, a decrease of 13 per cent. The National Accounts household expenditure on Transport shows that spending adjusted for inflation fell by 8 per cent. Prices in this category increased by 26 per cent over the period which suggests that, as with Food and non-alcoholic beverages, the rise in prices influenced households’ decisions to reduce their purchases.
The Living Costs and Food Survey (LCF) is a sample of households and not a census of the whole population. Therefore, the results are liable to differ to some degree from those that would have been obtained if every single household had been covered. Some of the differences will be systematic, in that lower proportions of certain types of household respond than of others. That aspect is discussed in ‘Response to the survey’ and ‘Weighting’. This section discusses the effect of sampling variability; in other words, the effect of differences in expenditure and income between the households in the sample and in the whole population that arise from random chance.
The degree of variability will depend on the sample size and how widely particular categories of expenditure (or income) vary between households. The sampling variability is smallest for the average expenditure of large groups of households on items purchased frequently and when the level of spending does not vary greatly between households. Conversely, it is largest for small groups of households, and for items purchased infrequently or for which expenditure varies considerably between households. A numerical measure of the likely magnitude of such differences (between the sample estimate and the value of the entire population) is provided by the quantity known as the standard error.
The calculation of standard errors takes into account the fact that the LCF sample is drawn in two stages: first a sample of areas (primary sampling units), then a sample of addresses within each of these areas. The main features of the sample design are described in ‘Description of the survey’. The calculation also takes account of the effect of weighting. The two-stage sample increases sampling variability slightly, but the weighting reduces it for some items.
Standard errors for detailed expenditure items are presented in relative terms in Table A1 (186 Kb Excel sheet) (standard error as a percentage of the average to which it refers). As the calculation of full standard errors is complex, this is the only table where they are shown. Tables B1 and B2 in this section show the design factor (DEFT), a measure of the efficiency of the survey’s sample design. The DEFT is calculated by dividing the ‘full’ standard error by the standard error that would have applied if the survey had used a simple random sample (‘simple method’).
|Percentage standard error||Percentage standard error||Households recording expenditure|
|Commodity or service||Weighted average weekly household expenditure (£)||Simple method||Design factor (DEFT)||Full method||Recording households in sample||Percentage of all households|
|All expenditure groups||413.90||1.0||1.1||1.1||5,692||100|
|Food and non-alcoholic drinks||54.80||0.8||1.1||0.9||5,658||99|
|Alcoholic drink, tobacco & narcotics||12.00||2.1||1.0||2.1||3,612||63|
|Clothing and footwear||21.70||2.3||1.0||2.4||3,793||67|
|Housing, fuel and power||63.30||1.4||1.1||1.6||5,676||100|
|Household goods and services||27.30||2.8||1.0||2.8||5,182||91|
|Recreation and culture||63.90||2.2||1.0||2.1||5,652||99|
|Restaurants and hotels||39.70||1.7||1.1||1.9||4,983||88|
|Miscellaneous goods and services||38.60||2.4||1.0||2.4||5,558||98|
|Percentage standard error||Percentage standard error||Households recording income|
|Source of income||Weighted average weekly household income (£)||Simple method||Design factor (DEFT)||Full method||Recording households in sample||Percentage of all households|
|Gross household income||713||1.2||1.0||1.2||5,687||100|
|Wages and salaries||469||1.8||1.0||1.7||3,337||59|
|Annuities and pensions (other than social security benefits)||63||3.5||0.9||3.2||1,865||33|
|Social security benefits||101||1.4||0.8||1.1||4,195||74|
A common use of standard errors is in calculating 95 per cent confidence intervals. Simplifying a little, these can be taken to mean that there is only a 5 per cent chance that the true population value lies outside the 95 per cent confidence interval, which is calculated as 1.96 times the standard error on either side of the mean. For example, the average expenditure on food and non-alcoholic drinks is £54.80 and the corresponding percentage standard error (full method) is 0.9 per cent. The amount either side of the mean for 95 per cent confidence is then:
1.96 x (0.9 ÷100) x £54.80 = £1.00 (rounded to nearest 10p)
Lower limit is 54.80 – 1.00 = £53.80 (rounded to nearest 10p)
Upper limit is 54.80 + 1.00 = £55.80 (rounded to nearest 10p)
Similar calculations can be carried out for other estimates of expenditure and income. The 95 per cent confidence intervals for main expenditure categories are given in Table B3.
|95% confidence interval|
|Commodity or service||Weighted average weekly household expenditure (£)||Lower limit||Upper limit|
|All expenditure groups||413.90||405.30||422.50|
|Food and non-alcoholic drinks||54.80||53.80||55.80|
|Alcoholic drink, tobacco & narcotics||12.00||11.50||12.50|
|Clothing and footwear||21.70||20.70||22.80|
|Housing, fuel and power||63.30||61.30||65.20|
|Household goods and services||27.30||25.70||28.80|
|Recreation and culture||63.90||61.20||66.60|
|Restaurants and hotels||39.70||38.20||41.20|
|Miscellaneous goods and services||38.60||36.80||40.40|
This formula treats the LCF sample as though it had arisen from a much simpler design with no multi-stage sampling, stratification, differential sampling or non-response weights. The weights are used but only to estimate the true population standard deviation in what is, in fact, a weighted design. The method of calculation is as follows:
In fact, the sample in Great Britain is a multi-stage, stratified, random sample described further in ‘Description of the survey’. First a sample of areas, the Primary Sampling Units (PSUs), is drawn from an ordered list. Then within each PSU a random sample of households is drawn. In Northern Ireland, however, the sample is drawn in a single stage and there is no clustering. The results are also weighted for non-response and calibrated to match the population separately by sex, by 5-year age ranges, and by region as described in ‘Weighting’.
The method for calculating complex standard errors for the weighted estimates used on this survey is quite complex. First, methods that take account of the clustering, stratification and differential sampling (and initial non-response weights) used in the design are applied. These are then modified to allow for the calibration weighting used on the survey. The exact formulae also depend on whether standard errors are being estimated for an estimated total or a mean or proportion. Here the method for a total is outlined.
Consecutive PSUs in the ordered list are first grouped into pairs or triples, at the end of a regional stratum. The standard error of a weighted total is estimated by:
Further details of this method of estimating sampling errors are described in A Sampling Errors Manual (B Butcher and D Elliot, ONS 1987).
The effect of the calibration weighting is calculated using a jackknife linearisation estimator. It uses the formula given above but with each household’s expenditure, xr, replaced by a residual from a linear regression of expenditure on the number of people in each household in each of the region and age by sex categories used in the weighting.
The formulae have been expressed in terms of expenditures on a particular item, but of course they can also be applied to expenditures on groups of items, commodity groups and incomes from particular sources.
Major changes in definitions since 1991 are described in the following section. Changes to definitions made prior to 1991 can be found in earlier editions of Family Spending.
A household comprises of one person living alone or a group of people (not necessarily related) living at the same address who:
share cooking facilities
and share a living room or sitting room or dining area
Resident domestic servants are included. The members of a household are not necessarily related by blood or marriage. As the survey covers only private households, people living in hostels, hotels, boarding houses or institutions are excluded. Households are included if some or all members are not British subjects, however, information is not collected from households containing members of the diplomatic service of another country or members of the United States armed forces.
Retired households are those where the household reference person is retired. The household reference person is defined as retired if they have reached state pension age and are economically inactive. Since May 2010 the state pension age for women has been increasing gradually to be in line with the male pension age of 65 by 2018. Therefore, if for example a male household reference person is aged over 65 years of age, but working part-time or waiting to take up a part-time job, this household would not be classified as a retired household. For analysis purposes two categories are used in this report:
‘A retired household mainly dependent upon state pensions’ is one in which at least three-quarters of the total income of the household is derived from national insurance retirement and similar pensions, including housing and other benefits paid in supplement to or instead of such pensions. The term ‘national insurance retirement and similar pensions’ includes national insurance disablement and war disability pensions, and income support in conjunction with these disability payments
‘Other retired households’ are retired households which do not fulfil the income conditions of 'retired household mainly dependent upon state pensions’ because more than a quarter of the household's income derives from other sources. For example, occupational retirement pensions and/or income from investments, or annuities.
From 2001/02 the concept of household reference person (HRP) was adopted on all government-sponsored surveys in place of head of household. The household reference person is the householder who:
owns the household accommodation, or
is legally responsible for the rent of the accommodation, or
has the household accommodation as an emolument or perquisite, or
has the household accommodation by virtue of some relationship to the owner who is not a member of the household.
If there are joint householders the household reference person will be the one with the higher income. If the income is the same, then the eldest householder is taken.
In most cases the members of co-operating households are easily identified as the people who satisfy the conditions in the definition of a household (see above), and are present during the record-keeping period. However, difficulties of definition arise where people are temporarily away from the household or else spend their time between two residences. The following rules apply in deciding whether or not such persons are members of the household:
Married people living and working away from home for any period are included as members, provided they consider the sampled address to be their main residence. In general, other people (such as relatives, friends and boarders) who are either temporarily absent or who spend their time between the sampled address and another address, are included as members if they consider the sampled address to be their main residence. However, there are exceptions which override the subjective main residence rule:
Children under 16 years of age away at school are included as members.
Older people receiving education away from home, including children aged 16 and 17, are excluded unless they are at home for all or most of the record-keeping period.
Visitors staying temporarily with the household, and others who have been in the household for only a short time are treated as members, provided they will be staying with the household for at least one month from the start of record-keeping.
A consequence of these definitions is that household compositions quoted in this report include some households where certain members are temporarily absent, for example, a ‘two-adult and children’ household where one parent is temporarily away from home.
In the report, people who have reached the age of 18 are classed as adults. In addition, those aged 16 to 18 who are not in full-time education, or who are married, are classed as adults.
In the report, people who are under 18 years of age, in full-time education and have never been married are classed as children.
However, in the definition of clothing, clothing for people aged 16 years and over is classified as clothing for men and women; clothing for those aged 5 to 15 as clothing for boys and girls; and clothing for those under five as babies clothing.
The MDK is the person in the household who is normally responsible for most of the food shopping. This includes people who organise and pay for the shopping although they do not physically do the shopping themselves.
Household members aged 16 and over, excluding those who for special reasons are not capable of keeping diary record-books, are described as spenders.
If a spender is absent for longer than 7 days they are defined as an ‘absent spender’. Absent spenders do not keep a diary and consequently are not eligible for the monetary gift that is paid to diary keepers.
If a household member is completely incapable of contributing to the survey by answering questions or keeping a diary, then they are defined as a ‘non-spender’. However, incapable people living on their own cannot be designated as non-spenders as they comprise the whole expenditure unit. If this is the case, the interviewer should enlist the help of the person outside of the household who looks after their interests. If there is no-one able or willing to help, the address is coded as incapable.
These are people aged 16 and over who fall into the following categories:
Employees at work – those who at the time of interview were working full-time or part-time as employees or were away from work on holiday. Part-time work is defined as normally working 30 hours a week or less (excluding meal breaks) including regularly worked overtime.
Employees temporarily away from work – those who, at the time of interview, had a job but were temporarily absent due to, for example, illness, temporary lay-off, or strike.
Government supported training schemes – those participating in government programmes and schemes who, in the course of their participation, receive training such as Employment Training, and including those who are also employees in employment.
Self-employed – those who, at the time of interview, said they were self-employed.
Unemployed – those who, at the time of interview, were out of employment and have sought work within the last four weeks and were available to start work within two weeks, or were waiting to start a job already obtained.
Unpaid family workers – those working unpaid for their own or a relative’s business. In this report, unpaid family workers are included under economically inactive in analyses by economic status ( Tables A17 (77 Kb Excel sheet) and B5 (91 Kb Excel sheet) ) because insufficient information is available to assign them to an economic status group.
Retired – people who have reached national insurance retirement age and are not economically active. Since May 2010 the female state pension age has been gradually increasing to align with the male pension age of 65 by 2018.
Unoccupied – people under national insurance retirement age who are not working, nor actively seeking work. This category includes certain self-employed people such as mail order agents and baby-sitters who are not classified as economically active.
From 2001 the National Statistics Socio-economic Classification (NS-SEC) was adopted for all official surveys, in place of Social Class based on Occupation (SC) and Socio-economic Groups (SEG). NS-SEC is itself based on the Standard Occupational Classification 2000 (SOC2000) and details of employment status. Although NS-SEC is an occupation-based classification, there are procedures for classifying those not in work.
The main categories used for analysis in Family Spending are:
1. Higher managerial and professional occupations, sub-divided into:
1.1 Large employers and higher managerial occupations
1.2 Higher professional occupations
2. Lower managerial and professional occupations
3. Intermediate occupations
4. Small employers and own account workers
5. Lower supervisory and technical occupations
6. Semi-routine occupations
7. Routine occupations
8. Never worked and long-term unemployed
10. Occupation not stated
11. Not classifiable for other reasons
The long-term unemployed are defined as those unemployed and seeking work for 12 months or more. Members of the armed forces, who were assigned to a separate category in social class, are included within the NS-SEC classification. Individuals that have retired within the last 12 months are classified according to their employment. Other retired individuals are assigned to the ‘Not classifiable for other reasons’ category.
These are the same areas as UK regions and countries, see region map within this section for more details.
This classification introduced in 2005/06 replaces the previous Department for Transport, Local Government and the Regions (DTLR) 1991 Census-based urban and rural classification, which was used in previous editions of Family Spending. The new classification is applied across Great Britain and is an amalgamation of the Rural and Urban Classification 2004 for England and Wales and the Scottish Executive Urban Rural Classification. These classifications are based on 2001 Census data and have been endorsed as the standard National Statistics Classifications for identifying urban and rural areas across GB. In broad terms, an area is defined as urban or rural depending on whether the population falls inside a settlement of 10,000 or more. For further details concerning these classifications please refer to the Rural/Urban Definition and LA Classification on the Office for National Statistics (ONS) website.
Any definition of expenditure is to some extent arbitrary, and the inclusion of certain types of payment is a matter of convenience or convention depending on the purpose for which the information is to be used. In the tables in this report, total expenditure represents current expenditure on goods and services. Total expenditure, defined in this way, excludes those recorded payments that are really savings or investments: for example, purchases of national savings certificates, life assurance premiums, and contributions to pension funds. Similarly, income tax payments, national insurance contributions, mortgage capital repayments and other payments for major additions to dwellings are excluded. Expenditure data are collected in the diary record-book and in the household schedule. Informants are asked to record in the diary any payments made during the 14 days of record-keeping, whether or not the goods or services paid for have been received. Certain types of expenditure which are usually regular though infrequent, such as insurance, licences and season tickets, and the periods to which they relate, are recorded in the household schedule as well as regular payments such as utility bills.
The cash purchase of motor vehicles is also entered in the household schedule. In addition, expenditure on some items purchased infrequently (thereby being subject to high sampling errors) has been recorded in the household schedule using a retrospective recall period of either 3 or 12 months. These items include carpets, furniture, holidays and some housing costs. In order to avoid duplication, all payments shown in the diary record-book which relate to items listed in the household or income schedules are omitted in the analysis of the data, irrespective of whether there is a corresponding entry on the latter schedules. Amounts paid in respect of periods longer than a week are converted to weekly values.
Expenditure tables in this report show the 12 main commodity groups of spending and these are broken down into items which are numbered hierarchically (see ‘Changes to definitions, 1991 to 2011’ which details a major change to the coding frame used from 2001/02).
Table A1 (186 Kb Excel sheet)
shows a further breakdown in the items themselves into components which can be separately identified. The items are numbered as in the main expenditure tables, and the average weekly household expenditure and percentage standard error is shown against each item or component.
Qualifications which apply to this concept of expenditure are described in the following paragraphs:
Goods supplied from a household’s own shop or farm
Spenders are asked to record and give the value of goods obtained from their own shop or farm, even if the goods are withdrawn from stock for personal use without payment. The value is included as expenditure
Hire purchase and credit sales agreements, and transactions financed by loans repaid by instalments
Expenditure on transactions under hire purchase or credit sales agreements, or financed by loans repaid by instalments, consists of all instalments that are still being paid at the date of interview, together with down payments on commodities acquired within the preceding three months. These two components (divided by the periods covered) provide the weekly averages which are included in the expenditure on the separate items given in the tables in this report
Club payments and budget account payments, instalments through mail order firms and similar forms of credit transaction
When goods are purchased by forms of credit other than hire purchase and credit sales agreement, the expenditure on them may be estimated either from the amount of the instalment which is paid or from the value of the goods which are acquired. Since the particular commodities to which the instalment relates may not be known, details of goods ordered through, for example, clubs or mail order firms, during the month prior to the date of interview, are recorded in the household schedule. The weekly equivalent of the value of the goods is included in the expenditure on the separate items given in the tables in this report. This procedure has the advantage of enabling club transactions to be related to specific articles. Although payments into clubs, etc. are shown in the diary record-book, these entries are excluded from expenditure estimates
Credit card transactions
From 1988 purchases made by credit card or charge card have been recorded in the survey on an acquisition basis rather than the formerly used payment basis. Thus, if a spender acquired an item (by use of credit/charge card) during the two week survey period, the value of the item would be included as part of expenditure in that period whether or not any payment was made in this period to the credit card account. Payments made to the card account are ignored. However any payment of credit/charge card interest is included in expenditure if made in the two week period
Amounts of income tax deducted under the Pay As You Earn (PAYE) scheme or paid directly by those who are employers or self-employed are recorded (together with information about tax refunds). For employers and the self-employed the amounts comprise the actual payments made in the previous 12 months and may not correspond to the tax due on the income arising in that period, for example if no tax has been paid but is due or if tax payments cover more than one financial year. However, the amounts of tax deducted at source from some of the items which appear in the Income Schedule are not directly available. Estimates of the tax paid on bank and building society interest and amounts deducted from dividends on stocks and shares are therefore made by applying the appropriate rates of tax. In the case of income tax paid at source on pensions and annuities, similar adjustments are made. These estimates mainly affect the relatively few households with high incomes from interest and dividends, and households including someone receiving a pension from previous employment
Expenditure on rented dwellings is taken as the sum of expenditure on a number of items such as rent, council tax, and water rates. For local authority tenants the expenditure is gross rent less any rebate (including rebate received in the form of housing benefit), and for other tenants it is gross rent less any rent allowance received under statutory schemes including the Housing Benefit Scheme. Rebate on council tax or rates (Northern Ireland) is deducted from expenditure on council tax or rates. Receipts from sub-letting part of the dwelling are not deducted from housing costs but appear (net of the expenses of the sub-letting) as investment income
Rent-free dwellings are those owned by someone outside the household and where either no rent is charged or the rent is paid by someone outside the household. Households whose rent is paid directly to the landlord by the DWP do not live rent-free. Payments for council tax for example are regarded as the cost of housing. Rebate on rates (Northern Ireland)/council tax/water rates (Scotland) (including rebate received in the form of housing benefit), is deducted from expenditure on rates/council tax/water rates. Receipts from sub-letting part of the dwelling are not deducted from housing costs but appear (net of the expenses of the sub-letting) as investment income
In the LCF, payments for water rates, ground rent, fuel, maintenance and repair of the dwelling, among other items, are regarded as the cost of housing. Receipts from letting part of the dwelling are not deducted from housing costs but appear (net of the expenses of the letting) as investment income. Mortgage capital repayments and amounts paid for the outright purchase of the dwelling or for major structural alterations are not included as housing expenditure, but are entered under ‘other items recorded’, as are council tax, rates (Northern Ireland) and mortgage interest payments. Structural insurance is included in ‘miscellaneous goods and services’.
Second-hand goods and part-exchange transactions
The survey expenditure data are based on information about actual payments and therefore include payments for second-hand goods and part-exchange transactions. New payments only are included for part-exchange transactions, that is the costs of the goods obtained less the amounts allowed for the goods which are traded in. Receipts for goods sold or traded in are not included in income.
The survey covers only private households and is concerned with payments made by members of households as private individuals. Spenders are asked to state whether expenditure that has been recorded on the schedules includes amounts that will be refunded as expenses from a business or organisation or that will be entered as business expenses for income tax purposes, for example rent, telephone charges, travelling expenses and meals out. Any such amounts are deducted from the recorded expenditure.
The standard concept of income in the survey is, as far as possible, that of gross weekly cash income current at the time of interview, that is before the deduction of income tax actually paid, national insurance contributions and other deductions at source. However, for a few tables a concept of disposable income is used, defined as gross weekly cash income less the statutory deductions and payments of income tax (taking refunds into account) and national insurance contributions. Analysis in Chapter 3 of this report and some other analyses of LCF data use ‘equivalisation’ of incomes: in other words adjustment of household income to allow for the different size and composition of each household. For more information see Chapter 3. The cash levels of certain items of income (and expenditure) recorded in the survey by households receiving supplementary benefit were affected by the Housing Benefit Scheme introduced in stages from November 1982. From 1984 housing expenditure is given on a strictly net basis and all rent/council tax rebates and allowances and housing benefit are excluded from gross income.
Although information about most types of income is obtained on a current basis, some data, principally income from investment and from self-employment, are estimated over a 12-month period.
The following are excluded from the assessment of income:
Money received by one member of the household from another (for example housekeeping money, dress allowance, children’s pocket money) other than wages paid to resident domestic servants.
Withdrawals of savings, receipts from maturing insurance policies, proceeds from sale of financial and other assets (such as houses, cars, and furniture), winnings from betting, lump-sum gratuities and windfalls such as legacies.
The value of educational grants and scholarships not paid in cash.
The value of income in kind, including the value of goods received free and the abatement in cost of goods received at reduced prices, and of bills paid by someone who is not a member of the household.
Loans and money received in repayment of loans.
Details are obtained of the income of each member of the household. The income of the household is taken to be the sum of the incomes of all its members. The information does not relate to a common or a fixed time period. Items recorded for periods greater than a week are converted to a weekly value.
Particular points relating to some components of income are as follows:
Wages and salaries of employees
The normal gross wages or salaries of employees are taken to be their earnings. These are calculated by adding to the normal ‘take home’ pay amounts deducted at source, such as income tax payments, national insurance contributions and other deductions (for example payments into firm social clubs, superannuation schemes, works transport, and benevolent funds). Employees are asked to give the earnings actually received including bonuses and commission the last time payment was made and, if different, the amount usually received. It is the amount usually received that is regarded as the normal take-home pay. Additions are made so as to include in normal earnings the value of occasional payments, such as bonuses or commissions received quarterly or annually. One of the principal objects in obtaining data on income is to enable expenditure to be classified in ranges of normal income. Average household expenditure is likely to be based on the long-term expectations of the various members of the household as to their incomes rather than be altered by short-term changes affecting individuals. Hence, if employees have been away from work without pay for 13 weeks or less, they are regarded as continuing to receive their normal earnings instead of social security benefits, such as unemployment or sickness benefit, that they may be receiving. Otherwise, normal earnings are disregarded and current short-term social security benefits taken instead. Wages and salaries include any earnings from subsidiary employment as an employee and the earnings of HM Forces
Income from self-employment
Income from self-employment covers any personal income from employment other than as an employee: for example, as a sole trader, professional or other person working on his own account or in partnership, including subsidiary work on his own account by a person whose main job is as an employee. It is measured from estimates of income or trading profits, after deduction of business expenses but before deduction of tax, over the most recent 12-month period for which figures can be given. Should either a loss have been made or no profit, income would be taken as the amounts drawn from the business for own use or as any other income received from the job or business. People working as mail order agents or baby-sitters, with no other employment, have been classified as unoccupied rather than as self-employed, and the earnings involved have been classified as earnings from ’other sources‘ rather than self-employment income
Income from investment
Income from investments or from property, other than that in which the household is residing, is the amount received during the 12 months immediately prior to the date of the initial interview. It includes receipts from sub-letting part of the dwelling (net of the expenses of the sub-letting). If income tax has been deducted at source the gross amount is estimated by applying a conversion factor during processing
Social security benefits
Income from social security benefits does not include the short-term payments such as unemployment or sickness benefit, received by an employee who has been away from work for 13 weeks or less, and who is therefore regarded as continuing to receive his normal earnings as described within section labeled ‘Definitions’
The quantiles of a distribution divide it into a number of equal parts; each of which contains the same number of households. In Family Spending, quantiles are applied to both household expenditure and income distributions.
For example, the median of a distribution divides it into two equal parts, so that half the households in a distribution of household income will have income more than the median, and the other half will have income less than the median. Similarly, quartiles, quintiles and deciles divide the distribution into four, five and ten equal parts respectively.
Most of the analysis in Family Spending is done in terms of quintile groups and decile groups.
In the calculation of quantiles for this report, zero values are counted as part of the distribution.
|Source of Income|
|References in tables||Components separately identified||Explanatory notes|
|a. Wages and salaries||Normal ‘take-home’ pay from main employment||(i) In the calculation of household|
|‘Take-home’ pay from subsidiary employment||income in this report, where|
|Employees’ income tax deduction||an employee has been away|
|Employees’ National Insurance contribution||from work without pay for|
|Superannuation contributions deducted from pay||13 weeks or less his normal|
|Other deductions||wage or salary has been used in|
|estimating his total income instead of|
|social security benefits, such as|
|unemployment or sickness benefits|
|that he may have received. Otherwise|
|such benefits are used in estimating total|
|income (see notes at reference e).|
|(ii) Normal income from wages and|
|salaries is estimated by adding to the|
|normal ‘take-home’ pay deductions|
|made at source last time paid, together|
|with the weekly value of occasional|
|additions to wages and salaries|
|(see Income in 'Definitions').|
|(iii) The components of wages and|
|salaries, for which figures are separately|
|available, amount in total to the normal|
|earnings of employees, regardless of the|
|operation of the 13 week rule in note (i)|
|above. Thus the sum of the components|
|listed here does not in general equal the|
|wages and salaries figure in tables of this|
|b. Self-employment||Income from business or profession,||The earnings or profits of a trade|
|including subsidiary self-employment||or profession, after deduction of|
|business expenses but before deduction|
|c. Investments||Interest on building society shares and deposits|
|Interest on bank deposits and savings accounts,|
|including National Savings Bank|
|Interest on ISAs|
|Interest on Gilt-edged stock and War Loans|
|Interest and dividends from stocks, shares, bonds,|
|trusts, debentures and other securities Rent or|
|income from property, after deducting expenses but|
|inclusive of income tax (including receipts from|
|letting or sub-letting part of own residence, net of the|
|expenses of the letting or sub-letting)|
|Other unearned Income|
|d. Annuities and pensions,||Annuities and income from trust or covenant|
|other than social security||Pensions from previous employers|
|e. Benefits||Child benefit||(i) The calculation of household|
|Guardian’s allowance||income in this report takes account of|
|Carer’s allowance (formerly Invalid care allowance)||the 13 week rule described at|
|Retirement pension (National Insurance) or old||reference a, note (i).|
|person’s pension credit|
|Widow’s pension/bereavement allowance or||(ii) The components of social security|
|widowed parent’s allowance||benefits, for which figures are|
|War disablement pension or war widow/widower’s||separately available, amount in total to|
|pension||the benefits received in the week|
|Severe disablement allowance||before interview. That is to say, they|
|Care component of disability living allowance||include amounts that are discounted|
|Mobility component of disability living allowance||from the total by the operation of the|
|Attendance allowance||13 week rule in note (i). Thus the sum|
|Job seekers allowance||of the components listed here differs|
|Winter fuel allowance||from the total of social security benefits|
|Cold Weather Payment||used in the income tables of this report.|
|Working tax credit||(iii) Housing Benefit is treated as a|
|Child tax credit||reduction in housing costs and not as|
|Statutory sick pay (from employer)|
|Industrial injury disablement benefit|
|Statutory maternity pay|
|Statutory paternity pay|
|Statutory adoption pay|
|Health in pregnancy grant|
|Any other benefit including lump sums and grants|
|Social security benefits excluded from Income|
|calculation by 13 week rule|
|f. Other sources||Married person’s allowance from husband/wife|
|temporarily away from home|
|Alimony or separation allowances; allowances for foster|
|children, allowances from members of the Armed|
|Forces or Merchant Navy, or any other money from|
|friends or relatives, other than husbands outside the|
|Benefits from trade unions, friendly societies|
|etc. other than pensions|
|Value of meal vouchers|
|Earnings from intermittent or casual work over 12|
|months, not included in a or b above|
|Student loans and money scholarships received by|
|persons aged 16 and over and aged under 16|
|Other income for children under 16 e.g. from spare time|
|jobs or income from Trusts or investments|
No significant changes.
Housing – Imputed rent for owner occupiers and households in rent-free accommodation was discontinued. For owner occupiers this had been the rent they would have had to pay themselves to live in the property they own, and for households in rent-free accommodation it was the rent they would normally have had to pay. Until 1990 these amounts were counted both as income and as a housing cost. Mortgage interest payments were counted as a housing cost for the first time in 1991.
Council Tax – Council Tax was introduced to replace the Community Charge in Great Britain from April 1993.
New expenditure items – The definition of expenditure was extended to include two items previously shown under ‘other payments recorded’. These were:
gambling payments, and
mortgage protection premiums
Expenditure classifications – A new classification system for expenditures was introduced in April 1994. The system is hierarchical and allows more detail to be preserved than the previous system. New categories of expenditure were introduced and are shown in detail in Table 7.1. The 14 main groups of expenditure were retained, but there were some changes in the content of these groups.
Gambling payments – data on gambling expenditure and winnings are collected in the expenditure diary. Previously these were excluded from the definition of household expenditure used in the FES. The data are shown as memoranda items under the heading ‘Other payments recorded’ on both gross and net bases. The net basis corresponds approximately to the treatment of gambling in the National Accounts. The introduction of the National Lottery stimulated a reconsideration of this treatment. From April 1994, (gross) gambling payments have been included as expenditure in ‘Leisure Services‘. Gambling winnings continued to be noted as a memorandum item under ‘Other items recorded‘. They are treated as windfall income. They do not form a part of normal household income, nor are they subtracted from gross gambling payments. This treatment is in line with the PRODCOM classification of the statistical office of the European Union (Eurostat) for expenditure in household budget surveys.
Geographical coverage – The FES geographical coverage was extended to mainland Scotland north of the Caledonian Canal.
Under 16s diaries – Two-week expenditure diaries for 7 to 15-year-olds were introduced following three feasibility pilot studies which found that children of that age group were able to cope with the task of keeping a two-week expenditure record. Children are asked to record everything they buy with their own money but to exclude items bought with other people’s money. Purchases are coded according to the same coding categories as adult diaries except for meals and snacks away from home which are coded as school meals, hot meals and snacks, and cold meals and snacks. Children who keep a diary are given a £5 incentive payment. A refusal to keep an under 16’s diary does not invalidate the household from inclusion in the survey.
Pocket money given to children is still recorded separately in adult diaries, and money paid by adults for school meals and school travel is recorded in the Household Questionnaire. Double counting is eliminated at the processing stage.
Tables in Family Spending reports did not include the information from the children’s diaries until the 1998/99 report. Appendix F in the 1998/99 and 1999/2000 reports show what difference the inclusion made.
Self-employment –- The way in which information about income from self-employment is collected was substantially revised in 1996/97 following various tests and pilot studies. The quality of such data was increased but this may have lead to a discontinuity. Full details are shown in the Income Questionnaire, available from the address in the introduction.
Cable/satellite television – Information on cable and satellite subscriptions is now collected from the household questionnaire rather than from the diary, leading to more respondents reporting this expenditure.
Mobile phones – Expenditure on mobile phones was previously collected through the diary. From 1996/97 this has been included in the questionnaire.
Job Seekers Allowance (JSA) – Introduced in October 1996 as a replacement for Unemployment Benefit and any Income Support associated with the payment of Unemployment Benefit. Receipt of JSA is collected with NI Unemployment Benefit and with Income Support. In both cases the number of weeks a respondent has been in receipt of these benefits is taken as the number of weeks receiving JSA in the last 12 months and before that period the number of weeks receiving Unemployment Benefit/Income Support.
Retrospective recall – The period over which information is requested has been extended from 3 to 12 months for vehicle purchase and sale. Information on the purchase of car and motorcycle spare parts is no longer collected by retrospective recall. Instead expenditure on these items is collected through the diary.
State benefits – The lists of benefits specifically asked about was reviewed in 1996/97. See the Income Questionnaire for more information.
Sample stratifiers – New stratifiers were introduced in 1996/97 based on standard regions, socio-economic group and car ownership.
Government Office Regions – Regional analyses presented using the Government Office Regions (GORs) formed in 1994. Previously all regional analyses used Standard Statistical Regions (SSRs). For more information see Appendix F in the 1996/97 report.
Bank/building society service charges – Collection of information on service charges levied by banks has been extended to include building societies.
Payments from unemployment/redundancy insurances – Information is now collected on payments received from private unemployment and redundancy insurance policies. This information is then incorporated into the calculation of income from other sources.
Retired households – The definition of retired households has been amended to exclude households where the head of the household is economically active.
Rent-free tenure – The definition of rent-free tenure has been amended to include those households for which someone outside the household, except an employer or an organisation, is paying a rent or mortgage on behalf of the household.
National Lottery – From February 1997 expenditure on National Lottery tickets was collected as three separate items: tickets for the Wednesday draw only, tickets for the Saturday draw only and tickets for both draws.
Northern Ireland sample boost – From 1997/98 Northern Ireland was over sampled in order to provide enough households to conduct separate regional analysis.
Children’s income – Three new expenditure codes were introduced: pocket money to children; money given to children for specific purposes and cash gifts to children. These replaced a single code covering all three categories.
Main job and last paid job – Harmonised questions were adopted.
Disabled Persons Tax Credit replaced Disability Working Allowance and Working Families Tax Credit replaced Family Credit from October 1999.
Household definition – The definition was changed to the harmonised definition which has been in use in the Census and nearly all other government household surveys since 1981. The effect is to group together into a single household some people who would have been allocated to separate households on the previous definition. The effect is fairly small but not negligible.
Up to 1999/2000 the FES definition was based on the pre-1981 Census definition and required members to share eating and budgeting arrangements as well as share living accommodation.
The definition of a household was:
One person or a group of people who have the accommodation as their only or main residence, and (for a group) share the living accommodation, that is a living or sitting room, and share meals together (or have common housekeeping)
The harmonised definition is less restrictive:
One person or a group of people who have the accommodation as their only or main residence and (for a group) share the living accommodation, that is a living or sitting room or share meals together or have common housekeeping
The effect of the change is probably to increase average household size by 0.6 per cent.
Question reductions – A thorough review of the questionnaire showed that a number of questions were no longer needed by government users. These were cut from the 2000/01 survey to reduce the burden on respondents. The reduction was fairly small but it did make the interview flow better. All the questions needed for a complete record of expenditure and income were retained.
Redesigned diary – The diary was redesigned to be easier for respondents to keep and to look cleaner. The main change of substance was to delete the column for recording whether each item was purchased by credit, charge or shop card.
Ending of MIRAS – Tax relief on interest on loans for house purchase was abolished from April 2000. Questions related to MIRAS (Mortgage Interest Relief at Source) were therefore dropped. They included some that were needed to estimate the amount if the respondent did not know it. A number were retained for other purposes, however, such as the amount of the loan still outstanding which is still asked for households paying a reduced rate of interest because one of them works for the lender.
Expenditure and Food Survey (EFS) introduced, replacing the Family Expenditure Survey (FES) and National Food Survey (NFS)
Household reference person – this replaced the previous concept of head of household. The household reference person is the householder, that is the person who:
owns the household accommodation, or
is legally responsible for the rent of the accommodation, or
has the household accommodation as an emolument or perquisite, or
has the household accommodation by virtue of some relationship to the owner who is not a member of the household.
If there are joint householders the household reference person is the one with the higher income. If the income is the same, then the eldest householder is taken.
A key difference between household reference person and head of household is that the household reference person must always be a householder, whereas the head of household was always the husband, who might not even be a householder himself.
National Statistics Socio-economic Classification (NS-SEC) – the National Statistics Socio-economic Classification (NS-SEC) was adopted for all official surveys, in place of Social Class based on Occupation (SC) and Socio-economic Group (SEG). NS-SEC is itself based on the Standard Occupational Classification 2000 (SOC2000) and details of employment status.
The long-term unemployed, which fall into a separate category, are defined as those unemployed and seeking work for 12 months or more. Members of the armed forces, who were assigned to a separate category in Social Class, are included within the NS-SEC classification. Residual groups that remain unclassified include students and those with inadequately described occupations.
COICOP – From 2001/02, the Classification Of Individual COnsumption by Purpose (COICOP/HBS, referred to as COICOP in this report) was introduced as a new coding frame for expenditure items. COICOP has been adapted to the needs of household budget surveys (HBS) across the EU and, as a consequence, is compatible with similar classifications used in national accounts and consumer price indices. This allows the production of indicators which are comparable Europe-wide, such as the Harmonised Indices of Consumer Prices (computed for all goods as well as sub-categories such as food and transport). The main categorisation of spending used in this report (namely 12 categories relating to food and non-alcoholic beverages; alcoholic beverages, tobacco and narcotics; clothing and footwear; housing, fuel and power; household goods and services; health; transport; communication; recreation and culture; education; restaurants and hotels; and miscellaneous goods and services) is only comparable between the two frames at a broad level. Table 4.1 has been produced by mapping COICOP to the FES 14 main categories. However the two frames are not comparable for any smaller categories, leading to a break in trends between 2000/01 and 2001/02 for any level of detail below the main 12-fold categorisation. A complete listing of COICOP and COICOP plus (an extra level of detail added by individual countries for their own needs) is available on request from the address in the introduction.
Proxy interviews – While questions about general household affairs are put to all household members or to a main household informant, questions about work and income are put to the individual members of the household. Where a member of the household is not present during the household interview, another member of the household (for example, a spouse) may be able to provide information about the absent person. The individual’s interview is then identified as a proxy interview. From 2001/02 the EFS began accepting responses that contained a proxy interview.
Short income – From 2001/02 the EFS accepted responses from households that answered the short income section. This was designed for respondents who were reluctant to provide more detailed income information.
Main shopper – At the launch of the EFS in April 2001, the respondent responsible for buying the household’s main shopping was identified as the ‘main diary keeper’ also known as the ‘main shopper’.
The importance of the main shopper is to ensure that information is obtained on the bulk of the shopping in the household. Without this person’s co-operation, there is insufficient information to use the other diaries kept by members of the household in a meaningful way. The main shopper must therefore complete a diary for the interview to qualify as a full or partial interview. Without their participation, the outcome will be a refusal no matter who else is willing to complete a diary.
Working Tax Credit replaced Disabled Persons Tax Credit and Working Families Tax Credit from April 2003.
Pension Credit replaced Minimum Income Guarantee from October 2003.
Child Tax Credit replaced Children’s Tax Credit and Childcare Tax Credit from April 2003.
No significant changes.
Urban and rural definition – A new urban and rural area classification based on 2001 Census data has been introduced onto the EFS dataset and is presented in Tables A38, A45 and A48 of this publication. The classification replaces the Department for Transport, Local Government and the Regions (DTLR) 1991 Census-based urban and rural classification that was used in previous editions of Family Spending. The new classification is the standard National Statistics classification for identifying urban and rural areas in England and Wales, and Scotland. Please refer to ‘Definitions’ for further details.
Motor vehicle road taxation refunds – Questions on road tax refunds were inadvertently omitted from the 2005/06 questionnaire. Within the Appendix A tables of the 2005/06 report, the heading for category 13.2.3 ‘Motor vehicle road taxation payments less refunds’ has been changed to reflect this omission.
Purchase of vehicles – During April to December 2005, respondents who had sold a vehicle were not asked whether they had bought that same vehicle in the previous year. This was corrected from January 2006, but means that some expenditure on vehicles may have been missed.
Reporting period –The LCF started reporting on a calendar-year basis, rather than for financial years.
Mortgage interest payments – An improvement to the imputation of mortgage interest payments was implemented and applied to 2006 and 2007 data in this publication, which should lead to more accurate figures. This will also lead to a slight discontinuity.
Mortgage capital repayments – An error was discovered in the derivation of mortgage capital repayments which was leading to double counting. This was amended for the 2006 and 2007 data in this publication, which will cause a minor discontinuity.
IHS – The LCF joined the Integrated Household Survey (IHS)
NS-SEC – The LCF question used to derive the student category for NS-SEC B was changed in 2008 due to the introduction of the Integrated Household Survey (IHS). Prior to the IHS, respondents were asked if they were currently in full-time education and those who responded yes to this question were classified as students. Since 2008, respondents have been asked if they are enrolled on any full-time or part-time education course and those who respond ‘yes’ have then been asked to select the course they are attending from a set of options. Respondents who select any of the full-time course options have been classified as students under NS-SEC. This more stringent definition of full-time student has resulted in a decrease in the number of people classified as students.
Gas & electricity payment methods – Following consultation with the Department for Energy and Climate Change (DECC), the payment methods have been updated for the gas and electricity questions. This has brought the LCF questions in line with those on the EHS. This may cause a slight discontinuity in the data.
A question was added to capture the take up of the Health in Pregnancy grant, a benefit introduced in April 2009.
A question capturing Cold Weather Payments was included from July 2009 onwards.
Multiple household interviews – In 2010 the LCF in line with other ONS social surveys changed the way interviews were conducted at addresses with more than one private household. Until July 2010 interviewers were instructed to interview all households (up to a maximum of three at any one address) when a sampled address contained more than one private household. From July onwards interviewers were no longer required to interview multiple households at these addresses, instead a random selection method is used to select one household to interview.
Northern Ireland sample – Until 2010 the LCF ran a boosted Northern Ireland sample which allowed for separate Northern Ireland analysis to be conducted, at the end of 2009 this boost came to an end.
Female pension age – Due to changes in the female pension age, the way in which pensioner households are identified has changed. Until May 2010 any female over 60 and male over 65 was defined as a pensioner. From May 2010 onwards the female pension age increases gradually, which is reflected in the LCF definition.
Internet subscription fees – For 2010 the internet subscription fees sub-category has been moved from recreation and culture to the communications category of COICOP.
Definition of a household – Changed in line with the definition used in the 2011 Census: One person living alone or a group of people (not necessarily related living at the same address) who share cooking facilities AND share a living room or sitting room or dining area.
Changes to Socio Economic Classification – The Standard Occupational Classification has been revised for the 2011 survey, which is reflected in the change in name from SOC2000 to SOC2010. Revisions have been made where changes in the organisation of work, or in the type of work carried were most evident. Occupations particularly affected by these changes include those related to information and communication technologies; education; health; social care; culture; media; sports; and leisure.
The most important change introduced in SOC2010 has been the revision of managerial status to improve the harmonisation between the classification of occupations in the UK with other countries in the European Union. Within the UK the title “manager” is often used to describe what would be regarded as supervisory or administrative positions in many other EU countries. The definition of manager now focuses on the control of resources at the organisational level and the strategic aspects of the position rather than the day-to-day tasks. The revisions have resulted in a significant decrease in the number of respondents coded to the Managers and Senior Officials major group and a significant increase in major group 2 Professional Occupations.
The SOC2010 revisions have created a discontinuity in the Family Spending tables that refer to socio-economic classification. The number of households with a household reference person in the Large employers and higher managerial category has decreased while the number of households with a household reference person in the Higher Professional category has increased.
Questionnaire changes – Questionnaire changes including the addition of a section designed to capture expenditure on combined communication packages, as well as alterations to the holiday expenditure questions, are detailed in ‘Survey Improvements’.
During 2010 work was done to improve the quality of the LCF outputs. A review of the quality assurance and validation processes was conducted and a number of areas of improvement identified.
In order to ensure the LCF questionnaire is up-to-date it is important that questions are regularly reviewed so that relevant changes can be made.
Reviewing the questionnaire is a process of continuous improvement and throughout 2010 this analysis resulted in several changes being incorporated into the 2011 questionnaire. Some of the main changes which have been implemented include a new section designed to capture expenditure on combined communication packages, as well as introducing a more enhanced method of recording holiday expenditure. The addition of the combined communication packages section particularly affected expenditure relating to internet costs, resulting in a large increase in expenditure for this COICOP category (8.4) for 2011. Similarly, the questionnaire change relating to holiday expenditure resulted in a large increase in the expenditure recorded for the package holidays COICOP category (9.6). These 2011 expenditure values are documented in Table A1 (186 Kb Excel sheet) , and are just some of the improvements which have taken place as a way of developing the questionnaire.
The Blaise CAPI is also reviewed throughout the year, with the help of feedback from pilot surveys and interviewers, to ensure that the questions asked are as simple to understand as possible, and similarly are interpreted in the same way by each respondent.
Since 1998/99 the survey has been weighted to reduce the effect of non-response bias and produce population totals and means. The weights are produced in two stages. First, the data are weighted to compensate for non-response (sample-based weighting). Second, the sample distribution is weighted so that it matches the population distribution in terms of region, age group and sex (population-based weighting).
Weighting for non-response involves giving each respondent a weight so that they represent the non-respondents that are similar to them in terms of the survey characteristics. From 1998/99 the EFS used results from the 1991 Census-linked study of non-respondents to carry out non-response weighting1. From 2007 onwards the EFS/LCF non-response classes and weights have been annually updated using 2001 Census-linked data.
The Census-linked studies matched census addresses with the sampled addresses of some of the large continuous surveys, including FES for the1991 link study and EFS for the 2001 link study. In this way it was possible to match the address details of the respondents as well as the non-respondents with corresponding information gathered from the Census for the same address. The information collected during the 1991 and then the 2001 Census/FES/EFS matching work was then used to identify the types of households that were being under-represented in the survey.
For the 1991 Census-based non-response weights, a combination of household variables were analysed with the software package AnswerTree (using the chi-squared statistics CHAID)2 to identify which characteristics were most significant in distinguishing between responding and non-responding households. These characteristics were sorted by the program to produce 10 weighting classes with different response rates. For the updated 2001 Census-based non-response weights, a combination of household variables were analysed using a mixed model approach. The mixed model is a combined approach to modelling, designed to benefit from the underlying statistical model of logistic regression as well as utilising AnswerTree. Updated weighting classes were produced, using this analysis, to further improve non-response weighting from 2007. The results of the 2011 Census-linked studies will be used to further update non-response weighting in due course.
The second stage of the weighting adjusts the non-response weights so that weighted totals match population totals. As the LCF sample is based on private households, the population totals used in the weighting need to relate to people living in private households. The population totals used are the most up-to-date official figures available; from 2006 onwards, these totals have been population projections based on estimates rolled forward from the 2001 Census. Population totals adjusted precisely to harmonise with the LCF definition of a private household were introduced for 2011.
These estimates used exclude residents of institutions not covered by the EFS/LCF, such as those living in bed-and-breakfast accommodation, hostels, residential homes and other institutions.
The non-response weights were calibrated3 so that weighted totals matched population totals for males and females in different age groups and for regions. An important feature of the population-based weighting is that it is done by adjusting the factors for households not individuals.
The weighting is carried out separately for each quarter of the survey. The main reason is that sample sizes vary more from quarter to quarter than in the past. This is due to reissuing addresses after an interval of a few months where there had previously been no contact or a refusal to a new interviewer. This results in more interviews in the later quarters of the year than in the first quarter. Quarterly weighting, therefore, counteracts any potential bias from the uneven spread of interviews through the year. Quarterly weighting also results in small sample numbers in some of the age/sex categories that were used in previous years. The categories have therefore been widened slightly to avoid this.
Table B4 shows the effects of the weighting by comparing unweighted and weighted data from 2011.
|Average weekly household expenditure|
|Commodity or service||Unweighted||Weighted as published||Absolute difference||Percentage difference|
|All expenditure groups||413.20||413.90||0.73||0.2|
|Food and non-alcoholic drinks||55.20||54.80||-0.39||-0.7|
|Alcoholic drink, tobacco & narcotics||12.10||12.00||-0.14||-1.1|
|Clothing and footwear||21.90||21.70||-0.14||-0.6|
|Housing, fuel and power||61.10||63.30||2.21||3.6|
|Household goods and services||28.00||27.30||-0.69||-2.5|
|Recreation and culture||64.40||63.90||-0.54||-0.8|
|Restaurants and hotels||38.70||39.70||0.92||2.4|
|Weekly household income:|
The weighting increased the estimate of total average expenditure by £0.73 a week. It had the largest impact on average weekly expenditure on housing, fuel and power, increasing the estimate by 3.6 per cent. It also increased the estimate of spending on education by 3.2 per cent, and the estimate for restaurants and hotels by 2.4 per cent. It reduced the estimate of spending on household goods and services by 2.5 per cent and the estimate for recreation and culture by 0.8 per cent. Weighting also increased the estimates of average income, by £1 a week for disposable household income and by £3 a week (0.4 per cent) for gross household income, which is the income used in most tables in the report.
Re-weighting also has an effect on the variance of estimates. In an analysis on the 1999/2000 data, weighting increased variance slightly for some items and reduced it for others. Overall the effect was to reduce variance slightly.
Further information on the method used to produce the weights is available from the contacts given in the background notes of this publication.
See Foster, K. (1994) Weighting the FES to compensate for non-response, Part 1: An investigation into Census-based weighting schemes, London: OPCS.
CHAID is an acronym that stands for Chi-squared Automatic Interaction Detection. As is suggested by its name, CHAID uses chi-squared statistics to identify optimal splits or groupings of independent variables in terms of predicting the outcome of a dependent variable, in this case response.
Implemented by the CALMAR software package before 2007 and GES for 2006–08 (updated weights).
Table B7 (88 Kb Excel sheet) provides an index to tables in this report and previous editions of Family Spending.
Symbols and conventions used in Family Spending 2012 edition
[ ] Figures should be used with extra caution because they are based on fewer than 20 reporting households.
.. The data is suppressed if the unweighted sample counts are less than 10 reporting households.
- No figures are available because there are no reporting households.
Rounding: Individual figures have been rounded independently. The sum of component items does not therefore necessarily add to the totals shown.
Averages: These are averages (means) for all households included in the column or row, and unless specified, are not restricted to those households reporting expenditure on a particular item or income of a particular type.
Period covered: Calendar year 2011 (1 January 2011 to 31 December 2011).
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