CEBR research reveals potential savings of £6K per household
Despite many finding the process of saving difficult, research by the Centre for Economics & Business Research (Cebr) on behalf of Post Office Money has found the average household could potentially save up to £5,950 a year. The ‘potential savings opportunity’ is the amount of disposable income households have left over after their total expenditure.
UK households spend £395 per week and individual adults spend £213 on average, across housing; transport; leisure; clothing, footwear and homeware; food and household energy7. The two biggest outgoings are housing (£98 per week) and transport (£80 per week). Then comes leisure (£73 per week), clothing, footwear and homeware (£64 per week), food (£58 per week), household energy (£22 per week).
Londoners spend the most of all regions in the UK, particularly in areas such as housing, where they spend an average of £158 per week, due to high house prices and rent costs.
Clothing, footwear and homeware is the category with the biggest opportunity to save, with frugal households spending 93% less than the average. This demonstrates that these areas are key to economise the household budget; particularly, through smart shopping and DIY hacks.
However, 40% of adults admitted to taking no steps to actively save money across key spending areas in the last year – with the least attention paid to saving money on personal finances (56%).
|Average weekly household expenditure|
|Housing||£98 per week|
|Transport||£80 per week|
|Leisure||£73 per week|
|Clothing, footwear and homeware||£64 per week|
|Food||£58 per week|
|Household energy||£22 per week|
Here’s how to find your potential savings in each area of household spend.
UK adults reduced their monthly bills by trying to reduce their household electric and gas use (39%), and even taking the steps to cancel certain entertainment packages (12%). Other popular ways of reducing household bills is shopping around for cheaper alternatives, with 22% switching gas or electricity supplier or hunting for a more competitive broadband package or provider (13%).
Whether you’re looking to cut back on your food bill, save for a rainy day, or find inventive ways to up your income; Skint Dad has the answer. Ricky Willis (AKA Skint Dad) launched his money-saving blog to help people do more with their family for less. The blog has grown into one of the largest money blogs in the UK with over 150,000+ readers each month and won Financial Blog of Year 2016 at the Headline Money Awards.
Clothing and homeware
UK families are trying to be frugal with their household spending by using coupons and discount vouchers (34%), purchasing less clothing (30%), buying items from discount stores (25%), using cashback websites (18%) and repairing faulty items rather than replacing it (15%).
To be more economical with food spending in the last year, UK adults have avoided eating out (25%) and started making their own packed lunches (22%). Supermarket hacks are also great money-savers, with people switching to supermarket own brands or economy ranges (34%), making lists to avoid over-spending (28%) and purchasing their groceries from the discount aisle (26%).
Author Jack Monroe shares a simple nutritious recipes to help you save on your food shop in her food blog Cooking on a Bootstrap.
To save money on travel and holidays, UK adults advised choosing to holiday out of season (20%), picking their holiday destinations based on price available deals (18%), searching online for the cheapest ways to buy foreign currency (15%), opting for a self-catering options (13%) and opting for hand-luggage only flights (11%).
Monica Stott, The Travel Hackblogs about weekend breaks and affordable adventures. “Buy tickets in advance – online prices will can be cheaper just be sure to look at reviews, so you are purchasing from a genuine vendor; you can also sometimes get skip the queue tickets for the same price online.”
UK adults are already taking some steps to better manage their money, with some looking for a more competitive insurance deal (21%), changing their savings or current account to ensure they get access to a better rate (12%) or benefit from benefits associated with these accounts (7%).
Savers can benefit from putting their credit in order, including, reducing their credit balance to reduce interest payments (10%) or switching credit card providers to benefit from 0% interest deals (9%). Iona Bain, Young Money, is the youngest governor of the Pensions Policy Institute. “Keep a money diary – it will help you keep track of any money you do retain through cost-cutting exercises.” Here is Iona’s budget planner to help track your spending.
Save more campaign
Post Office Money has launched Spend Well, Save More, a campaign to help people spend better and boost their household savings. Ross Hunter: “We know that UK households are already spending about 1.4 hours a month looking at their budget, trying to find ways to better manage their money. We want to help them use that time effectively to help reduce their spending, so they can save more without it having a huge impact on their lifestyle.”