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Price rises push up UK household spending on essential items by 55%

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Price rises push up UK household spending on essential items by 55%
Spending on non-essentials has only risen by a small amount over the past year. Photo: Christopher Furlong/Getty

UK household spending on essential items, not including mortgage and rent payments, has jumped 55% year-on-year, according to new data from money management app Plum.

In November 2021 Brits spent an average of £201 ($265) on "essentials" including utilities, bills and fuel — equivalent to 25% of their total outgoings. 

This is a jump of £71 compared to the same time last year when households spent an average of £130 on essentials — 19% of total monthly expenditure.

Spending on essentials also rose significantly during the three months to September compared to the same time period a year ago, highlighting the impact of rising prices on household finances.

The average expenditure for the quarter rose by 56% from £393 in Q3 2020 to £615 in Q3 2021, according to the data.

Meanwhile, spending on non-essentials has only risen by a small amount during the past year.

Read more: UK house prices keep rising as property market faces supply drought

In November this year, the average amount spent on items such as entertainment, recreation, health and fitness was £678, which is up by only £1 on November 2022.

Even discount sale events such as Black Friday and Cyber Monday did little to boost expenditure this year as spending on these days decreased by 5% and 7% respectively compared with 2020.

The cost of living in the UK has been rising steadily this year, with inflation increasing from 0.4% to a 10-year high of 4.2% in October.

There have been mounting concerns about increasing prices in the UK during the past month, due to rising inflation. 

Prices in shops rose by 0.3% in November 2021 for the first time since May 2019, according to figures from the British Retail Consortium (BRC) and data provider Nielsen.

Food price inflation rose to 1.1% in November, up from 0.5% in October, and above the 12 and six-month average price growth rates of 0.1% and the highest inflation rate since November 2020.

Read more: UK hiring and job vacancies rise sharply

BUXTON-ENGLAND - FEBRUARY 23: A man purchases fruit and vegetable from a greengrocer market stall on February 23, 2021 in Buxton, England. (Photo by Nathan Stirk/Getty Images)
Food price inflation rose to 1.1% in November, up from 0.5% in October. Photo by Nathan Stirk/Getty Images

Fresh food inflation increased to 1.2% in November, up from 0.3% in October — the highest inflation rate since August 2019.

Recently, automotive group RAC called for lower fuel prices for consumers as an average 3.1p was added to the price of a litre of unleaded petrol, which cost 147.28p at the end of November. Meanwhile, 2.7p was added to the cost of diesel, which ended last month costing 150.64p on average.

Victor Trokoudes, CEO & co-founder of Plum, said: “We are starting to see the impact rising prices are having on the spending habits of Brits up and down the country.

“Every household will have been impacted in some way by inflation in recent months, with fuel, energy and food prices all going up.

“The difference might have been incremental to begin with but there is clear evidence that people are now having to dig deeper in to their pockets to cover everyday essentials.

“As a result, it seems people are tightening their purse strings in other areas, as the data from Black Friday and Cyber Monday shows.

Read more: Supply woes to hit UK recovery and slow growth

“In addition to being more frugal, we expect people will begin building up their savings buffers in preparation for higher costs and to meet any unexpected bills this winter.

“A lot of Brits are unfamiliar with such high inflation, so they will need to manage their money carefully in the months to come to ride out this period of economic uncertainty.”

Watch: What is inflation and why is it important?

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