1. Abstract

This chapter examines trends in household expenditure over time. Table 4.1 and table 4.2 (see tables section) represent expenditure for the years 2001/02 to 2013, adjusted to take account of inflation mainly using the Consumer Prices Index (CPI). This enables a comparison of expenditure to be made between survey years that allows for changing prices. More detail on this is given in the Background section. Year-on-year comparisons must be treated with caution, because each year the LCF is reviewed and changes are made to keep it up to date. Expenditure over the same period is also shown without adjusting for inflation in table 4.3 (see tables section).

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2. Key points

  • Household average weekly expenditure has decreased since 2006, once inflation has been taken into account

  • Spending declined to £517.30 in 2013, from its peak in 2006 (adjusted to 2013 prices) when households spent an average of £539.80 per week

  • Between 2001/2 and 2006, average expenditure was at a higher level than that seen since 2006

  • Housing (net), fuel and power accounted for the highest average weekly spending in 2013, at £74.40, an increase from £70.70 in 2012 (adjusted to 2013 prices). Renting was the biggest area of expenditure in this category, followed by electricity gas and other fuels (it does not include mortgage payments, council tax or Northern Ireland rates). This category accounted for 14% of household expenditure, on average, in 2013

  • Transport remains the second highest expenditure category, averaging £70.40 per week in 2013. This was an increase from £64.80 per week in 2012, driven by an increase in the sales of new cars. However, transport expenditure has decreased in recent years from £88.00 in 2001/2 (adjusted for inflation)

The results show slight increases across a range of expenditure categories. However, these findings should be treated with caution due to changes to the way the survey recorded certain types of expenditure in 2013

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3. About this chapter

This chapter examines trends in household expenditure over time. Table 4.1 (82.5 Kb Excel sheet) and table 4.2 (91.5 Kb Excel sheet) present expenditure for the years 2001/2 to 2013, adjusted to take account of inflation using mainly the Consumer Prices Index (CPI). This enables a comparison of expenditure to be made between survey years that allows for changing prices. Expenditure over the same period is also shown without adjusting for inflation ( table 4.3 (82 Kb Excel sheet) ).

Changes and differences mentioned in the text have been found to be statistically significant at the 95% confidence level, unless stated. There is more detail in the background section.

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6. Background

This chapter presents household expenditure data over time using the Classification of Individual COnsumption by Purpose (COICOP) classification. The expenditure figures have been deflated to allow comparison of expenditure in real terms across survey years.

The figures and tables present figures that have been deflated to 2013 prices using the consumer prices index (CPI), using indices specific to each major COICOP category. This is with the exception of specific items to which the CPI is not applicable: for mortgage interest payment and council tax payments the Retail Prices Index (RPI) was used. The approach used to deflate figures to 2013 prices is consistent with the approach used for Family Spending, 2012. However, it is different from editions previous to this, when the all-items RPI was used.

Tables based on the Family Expenditure Survey (FES) classification, used by the survey for years prior to 2001/2, have been reported in previous editions. They are not presented here, but can be made available on request. The time series presented, based on COICOP, has been increased to include 2001/2 to 2013; the range of years on which the survey has reported on COICOP.

The LCF is reviewed every year and changes are made to keep it up to date. Therefore, year-on-year changes should be interpreted with caution. This is particularly relevant for 2013 data; substantial changes were made to the questionnaire following research and testing. These changes included recording of household utility expenses, purchase of furniture and spending on air fares. It is important to continue to review the survey, to make sure it captures all types of spending as fully as possible, in an environment where products and methods of payment change rapidly. A detailed breakdown of the items that feed into each COICOP heading can be found in table A1 (153.5 Kb Excel sheet).

Standard errors for categories with lower levels of spending tend to be higher, so trends for these categories need to be treated with a degree of caution. Standard errors have been calculated for the data presented in this chapter; including the figures that have been deflated to 2013 prices (standard errors are discussed in more detail in appendix B). These calculations have been taken into account in the testing for statistical significance. This testing indicates the probability with which we are confident that the difference between the estimates under examination did not occur by chance.

Changes and differences mentioned have been found to be statistically significant at the 95% confidence level, unless stated. This means that the probability that the difference occurred by chance is low (1 in 20 or lower). Note that spending on certain items, notably tobacco and alcohol, may be under-reported.

COICOP time series data in this publication are not directly comparable with UK National Accounts household expenditure data, 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 (Consumer Trends guidance has more details) and may be more appropriate for finding long term trends on expenditure.

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7 .Background notes

  1. Symbols and conventions used in Family Spending 2014 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 2013 (1 January 2013 to 31 December 2013).

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Giles Horsfield
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Telephone: +44 (0)1633 455678