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Chapter 4: Trends in Household Expenditure Over Time This product is designated as National Statistics

Released: 04 December 2012 Download PDF

Abstract

This chapter presents household expenditure data over time using two different classifications: Firstly, Classification Of Individual COnsumption by Purpose (COICOP). COICOP is the internationally agreed standard classification for reporting household consumption expenditure, and has been used since 2001/02, first in the Expenditure and Food Survey (EFS), and subsequently in the Living Costs and Food Survey (LCF). The second classification used is the Family Expenditure Survey (FES). This was the main classification prior to 2001/02. Although it has now been superseded, its use here enables a longer time series to be presented. The figures and tables in this chapter (except Table 4.5) present figures that have been deflated using the All Items Retail Prices Index (RPI) data. This allows a comparison of expenditure in real terms to be made between the survey years. The commentary refers to the time series produced using these deflated figures. In addition, expenditure over time using COICOP in real terms is shown in Table 4.5, but no commentary is given on this table.

Interpreting EFS/LCF time series data

Before the introduction of the Expenditure and Food Survey (EFS) in 2001/02, expenditure data were collected via the Family Expenditure Survey (FES) and classified using the FES method of classification. These data have been retained and published alongside the COICOP time series and are presented in Tables 4.1 (84.5 Kb Excel sheet) and 4.2 (80 Kb Excel sheet) .

Time series data based on the FES classification from 2001/02 ( Tables 4.1 (84.5 Kb Excel sheet) and 4.2 (80 Kb Excel sheet) ) have been constructed by mapping COICOP data onto the FES classification. As such, the ‘all expenditure groups’ totals in Table 4.1 (84.5 Kb Excel sheet) may not equal the sum of the component commodities or services as the mapping process is not exact. Due to the differences in the definitions of the classification headings, it is not possible to directly compare the FES data with the COICOP data. For example, ‘motoring’ in the FES classification includes vehicle insurance, whereas the ‘transport’ heading under COICOP excludes this expenditure.

As mentioned above, Tables 4.1 (84.5 Kb Excel sheet) to 4.4 (121.5 Kb Excel sheet) contain data that have been deflated to 2011 prices. To produce these data, each year’s expenditure figures have been adjusted using the ‘All Items RPI’ to account for price inflation that has occurred since that year. This results in a table of figures displayed in ‘real terms’ (that is at prices relative to 2011 prices), which allows comparisons to be made between different survey years. (The ‘All Items RPI’ can be downloaded from the Office for National Statistics website). Data in Table 4.5 (100 Kb Excel sheet) have not been deflated to 2011 prices and therefore show the actual expenditure figures for each survey year.

Each year the LCF is reviewed and changes are made to keep it up to date. As such, year-on-year changes should be interpreted with caution. A detailed breakdown of the items that feed into each COICOP heading can be found in Table A1 (186 Kb Excel sheet) , while details of definition changes can be found in Appendix B.

Trends for the categories with lower levels of spending need to be treated with a degree of caution as the standard errors for these categories tend to be higher (standard errors are discussed in more detail in Appendix B). It should also be noted that there may be underreporting on certain items (notably tobacco and alcohol).

COICOP time series data in this publication are not directly comparable with UK National Accounts household expenditure data, which are published in Consumer Trends. (This publication can be downloaded from the Office for National Statistics website). National Accounts figures draw on a number of sources in addition to the LCF (please refer to Appendix B of Consumer Trends for details) and may be more appropriate for deriving long term trends on expenditure.

Household expenditure over time

Figure 4.1 and Table 4.3 (88 Kb Excel sheet) show total household expenditure at 2011 prices, broken down by COICOP classification, over the period 2005/06 to 2011. Average weekly expenditure was at its highest for this period in 2006, a value of £541.20, it has since decreased and has reached its lowest value of £483.60 in 2011.

Figure 4.1 Total household expenditure based on COICOP classification, 2005-6 to 2011, at 2011 prices(1)

United Kingdom

This table is part of a series of figures relating to household expenditure. Estimates are drawn from the Living Costs and Food Survey.
Source: Living Costs and Food Survey - Office for National Statistics

Notes:

  1. Figures have been deflated to 2011 prices using the RPI All Items Index.
  2. From this version of 2006, figures shown are based on weighted data using updated weights, with non-response weights and population figures based on the 2001 census.
  3. Excluding mortgage interest payments, council tax and Northern Ireland rates.

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Excluding the other items category, transport was the COICOP category which consistently had the highest average weekly spend throughout the time series at 2011 prices. Spending levels were greatest towards the start of the time series, with households spending £75.20 per week in 2005/06; this subsequently fell every year to reach the lowest level of £64.30 in 2009. In 2010 this expenditure increased to £68.20 and then fell to £65.70 in 2011. Table 4.4 (121.5 Kb Excel sheet) shows this is 14 per cent of overall household spending (the same as seen in 2010 but slightly higher than the three years prior to 2010). The second highest expenditure was on recreation and culture, which has also fallen during the time series before a small increase in 2011. The highest weekly spending on recreation and culture was £70.10 in 2005/06 before it declined to its lowest amount of £61.10 in 2010, and then increased to £63.90 in 2011. This category accounted for between 12 and 13 per cent of overall spending throughout the time series.

Housing, fuel and power was the only COICOP heading that has seen a substantial increase over the time series, with average weekly expenditure values increasing from £53.80 in 2005/06 to £63.30 in 2011.

Among the twelve COICOP headings, alcoholic drinks, tobacco & narcotics, health and communication had the least variable expenditure over the time series at 2011 prices. Alcoholic drinks, tobacco & narcotics expenditure varied between £11.80 and £13.20 per week (consistently at 2 per cent of total expenditure for each year); health expenditure varied between £5.30 and £7.00 per week (representing 1 per cent of total expenditure for each year); and finally communication expenditure varied between £12.80 and £14.50 per week (representing 3 per cent of total expenditure for each year).

As a percentage of total weekly expenditure, spending on each of the following categories remained relatively stable across the time series: restaurants and hotels (8 per cent), household goods and services (between 6 and 7 per cent) and clothing and footwear (between 4 and 5 per cent). Expenditure on restaurants and hotels was at its highest value of £45.00 per week in 2006, and its lowest was £39.70 in 2011. Household goods and services varied in average weekly spending from £36.60 per week in 2005/06, to £27.30 in 2011. This category is one of three, along with clothing and footwear and restaurants and hotels for which expenditure values in this time series were at their lowest in 2011.

Background notes

  1. 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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