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Money News
Families need £25,000 just to break even
Friday 25 November, 2011
By Martin Fagan
Soaring costs mean the average household will struggle this Christmas.
The average British family needs £24,600 a year just to get by, says research by Skipton Financial Services.
The figure consists of mortgage or rent, utilities, insurance, food shopping and motoring, plus the cost of dressing the family, owning a mobile phone and landline, travelling to and from work and maintaining a property.
However, the sum excludes any luxuries whatsoever - such as takeaways, restaurant meals, nights out, weekends away or holidays.
Andrew Barker, managing director of Skipton Financial Services, said: “It's frightening how everything adds up. The cost of living is astronomical and, with the rising prices of food, petrol and energy bills, inflation continues to hit families hard.
“With many sectors currently suffering a pay freeze, it is difficult to increase your monthly incomings, so it is even more important to be ahead of the game with your expenditure.”
The research also found that 40% spend most of their cash on things they want, rather than save it for the future, with almost one in three admitting to not having a savings account.
The study, which analysed the spending habits of parents with at least two children living under the same roof, found the following to be the biggest costs to mum and dad:
- Mortgage repayments - average total £4,730 a year
- The weekly food shop - £86 a week or £4,457 a year
- Paying off credit card bills and loans - £3,131 every year
- Filling up with petrol - £47 a week, or £2,452 a year
- Commuting to and from work - £2,445 annually
- Gas, electricity and water bills - £1,282 each year
- Council tax - £1,217
- Satellite or cable TV - £476
- Mobile phone bills - average £368 a year
Barker advised: “Make a monthly budget plan and put everything on there. Get your bank statements and check all direct debits and standing orders. It is vital that you are aware how much is going out of your account and you may even spot things like magazine subscriptions or gym memberships that are no longer needed.”
In a separate survey, consumer champion Which? found that four in ten people will be spending less this Christmas, and half are worried about the cost of buying presents.
Photo by Images_of_Money