150804 Average household spending 2
  • The method. It may be a mad kaleidoscope of colour, but the above pie chart was a rather dull thing to produce. This Office for National Statistics dataset lies behind it. They’re the best of numerous household expenditure figures, even though their most recent incarnation is for 2013. We’ve simply multiplied them by 52 to produce annual, rather than weekly, totals. We’ve also grouped together some of the ONS’s categories to simplify the chart. So… well, now you know.
  • The pie… The overall size of the pie is £37,107. This is, technically, the amount that the typical household spent in 2013. It’s worth noting that this total is lower than the average gross income for that year, of about £39,200. The average household making and spending the average amounts of money – not that such a statistical paragon exists in real life – should have a bit of cash left over at the end of the year.
  • …and its slices. As always, the largest slices catch the eye. We’ve included direct taxes and National Insurance Contributions on our chart, and these are the largest slice of all – adding up to 19.4 per cent of the pie. Next are housing costs, at 15.7 per cent. Then recreation on 10.6 per cent. That the smallest slice is for health spending is probably more of a tribute to the establishment of the NHS than to our collective vitality.
  • The past. The ONS’s historic data on household expenditure is less detailed than – and therefore not directly comparable to – our pie chart. But it is still informative. Many areas of expenditure seem to have receded since those extravagant days before the crash, whether in real terms or as a proportion of overall spending. Practically the only exception is housing costs (here excluding mortgages), which went from £3,401 in 2006 to £3,869 in 2013, even after adjustments are made for inflation. Or from 12 per cent of the pie to 14 per cent.
  • The point. All of which is to say that we spend more on some things than on others. A simple point, sure, but also an important one – for it indicates where our attention should lie. If, say, housing costs rise faster than other costs, then it will have a particularly severe effect on people’s budgets. And it has. Hence why the ONS is now working to develop a measure of inflation, explained here, that better accounts for bricks and mortar. For its part, To the Point shall also return to the subject.