In the year to April 2020, average weekly household spending fell slightly to £587.90.
Households in the highest income bracket spent four times as much as those in the lowest bracket: their average disposable income was 11 times higher, so they were already saving more.
Those on the lowest incomes spent 54% of their total weekly expenditure on essentials – while those on the highest incomes spent 42%. It was harder for those on lower incomes to cut back.
Households under 30 spent a much bigger proportion of their money on housing and food than any other age group – 41% of their weekly spending. They’re also more likely to have been affected by job losses during the crisis.
The richest households spent five times as much on non-essentials like eating out and having fun. They’re likely to have saved much more during the crisis.
Sarah Coles, personal finance analyst, Hargreaves Lansdown: “We were never all in the same boat: some people are in comfortable yachts while others are in leaky dinghies. Now that we’re all in the same rough seas, it’s easy to see why some people are struggling to stay afloat while for others it’s more plain sailing.
“Lower earners and younger people were spending most of their incomes on essentials before the pandemic hit, so furlough and job losses were a hammer blow to their budgets. To make matters worse, they were also more likely to see their job affected during the crisis than professionals and higher earners.
“Meanwhile, the highest earners enjoyed 11 times the income, had far more cash left over after essentials, and saw their costs fall naturally as their favourite restaurants and theatres were closed.
“With more cash free to save, 11 times the income, and almost 60% of their weekly spending going on nice-to-haves, those on higher incomes have been far better positioned to weather the storm. To make life even more straightforward, they also naturally cut the £127.70 they spent each week on recreation and culture, hotels and restaurants as these parts of the economy shut down. Those on the lowest incomes were able to shave just £47 off their spending on these things.
“The pandemic hasn’t created the vast divide between the third of people who have had to spend their way through their savings during the pandemic, and the quarter who have built them up. It has just made things even worse for those who are struggling to manage on lower incomes.”
10 spending stats from the release
- We spend an average of £63.70 a week on food and non-alcoholic drink.
- £48.70 of which was in large supermarkets.
- £65 million a week is spent on chocolate.
- £14 million a week is spent on tea.
- £190 million a week is spent on our pets.
- £122 million a week is spent on hairdressing and beauty treatments.
- £1.47 billion a week is spent in restaurants and hotel.
- We spend £34.70 a week each on pensions and life assurance
- £24.50 a week on electricity and gas.
- £22.30 a week on petrol and diesel.