HOUSEHOLDS are spending more, and the levels are close to the pre-covid pandemic levels.
New research released last week shows that while the average weekly household expenditure in the UK had fallen by 18.1 percentage points in 2021, it has climbed in the two years since.
Tax and accounting specialists RIFT Tax Refunds said that in 2019, the last year before covid arrived, the average weekly expenditure of UK households £592, but dropped to £482 by 2021.
In 2022, it climbed 9.8% to £529, and an additional 10.7% last year to £586.
The high cost of living and increasing interest rates are factors, but RIFT says its analysis suggests consumer choice is driving the increase rather than necessity.
It says the restaurant and hotel category has seen the largest rise: up 47.4% between 2022 and 2023.
Spending on clothing and footwear is also up by 38.6%, while there has been a 37.1% increase in spending on recreation and culture and a 12.1% jump in spend on miscellaneous goods and services.
Household goods and services also make the top five increase with spending up 17.6%.
For its research RIFT used additional data from the Office for National Statistics’s consumer shopping basket.
This increases double digit percentage point increases on whiskey (+15.5%), gin (+14.8%) and draught fizzy drinks (+12.3%).
Dog food, which has seen inflationary price rises, has increased 16 percentage points, and theatre tickets have increased by nearly 12 percentage points.
Fabric conditioner (+15.7%) and curtains (+15.6%) have seen the biggest cost increases when it comes to household goods and services, while sunscreen (+13.1%), liquid soap (+13%) and women’s hair dye (+12.4%) have seen the largest increases within the miscellaneous goods and services category.
“Household expenditure had been on the decline during a tough pandemic period but over the last two years, we’ve seen the average spend climb, returning almost to pre-pandemic levels,” said Bradley Post, MD of RIFT.
“There’s no doubt that the higher cost of living has contributed to this increased cost, as many items have seen an increase in price over the last year alone. However, as our analysis shows, the increase in household spending seen in 2023 has been largely driven by non-essential purchases within social and recreational spending categories.
“This suggests that, having weathered the storm of the pandemic and the resulting economic instability, many households are now breathing a little easier when it comes to their finances and have the security to make purchases based on choice, not just necessity.”
