1. Introduction

This chapter examines trends in household expenditure over time. Table 4.1 (78.5 Kb Excel sheet) and Table 4.2 (87 Kb Excel sheet) present expenditure for the survey year ending March 2002 to December 2014, 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 (in current prices) ( Table 4.3 (82.5 Kb Excel sheet) ).

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

Each year the Living Costs and Food Survey (LCF) is reviewed and changes are made to keep it up to date. As such, year on year changes should be treated with caution.

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2. Main points

In 2014:

  • average household weekly spending increased to £531.30, from its lowest level in 2012 (adjusted to 2014 prices) when households spent an average of £507.40 per week

  • average expenditure remains at a lower level than that seen before 2007

  • transport accounted for the highest average weekly spend, at £74.80, an increase from £70.60 in 2013 (adjusted to 2014 prices); the increase in spending on transport can partly be attributed to an increase in purchases of new and second hand cars, and follows a decreasing trend between the survey year ending March 2002 and December 2012

  • housing (net), fuel and power (excluding mortgage payments) was the second highest expenditure category, averaging £72.70 per week; this was a decrease from £76.60 in 2013, driven by a decrease in spending on household fuel, and follows a generally upward trend from the survey year ending March 2002

  • there were slight increases between 2013 and 2014 across most expenditure categories, providing evidence that consumer confidence is increasing as the economic recovery continues

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5. 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.

Data presented in the figures and tables has been deflated to 2014 prices using the Consumer Prices Index (CPI) and the indices are specific to each major COICOP category. For items that are not applicable to the CPI, for example mortgage interest payment and council tax payments, the Retail Prices Index (RPI) was used. The approach used to deflate figures to 2014 prices is consistent with the approach used for Family Spending, 2012 and Family Spending, 2013. However, it is different from editions previous to this, when the all-items RPI was used.

The Living Costs and Food Survey (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. 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 (154.5 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 2014 prices (standard errors are discussed in more detail in the Methodology chapter). 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 are 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, which are published in Consumer Trends. 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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6 .Background notes

  1. Symbols and conventions used in Family Spending 2015 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 2014 (1 January 2014 to 31 December 2014).

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    Giles Horsfield

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Giles Horsfield
Telephone: +44 (0) 1633 455678