Cebr was commissioned by Yorkshire Building Society to examine the current financial resilience of households across the UK.
With the economy still recovering from damage sustained during the pandemic, and the tax burden increasing for many households, ongoing rises in inflation could not have come at a worse time. Average weekly earnings are expected to grow by 4% a year on average between
2022 and 2024, but as ever- increasing energy and fuel costs push up the prices of goods and services, average weekly household spending is expected to rise by 6% a year on average over the next three years.
Some of the key findings from the report are:
- As ever-increasing energy and fuel costs help push up the prices of goods and services, average weekly household spending is expected to reach £705 by 2024, up from £595 in 2021: an 18% cumulative increase, while earnings for the average worker are only set to rise by 13% over the same time period.
- Transport has been the largest contributor to household expenditure in 15 of the last 20 years and its share of overall spending will grow from 13.8% (£59.22) in 2002 to a predicted 14.5% (£102.39) in 2024.
- Nearly four out of ten people (39%) say they have had to dip into their savings during the past 12 months. In addition, more than one in three adults (35%) say they are likely to dip into their savings during the next 12 months.
This report allow for a look into what has happened to the nation’s finances over the past 20 years and what impact the current crisis is likely to have across 2022 and in the future.
Some media publications referencing this report quoted a finding regarding households facing a £100 a month budget shortfall by 2024. This figure was provided by YBS for illustrative purposes and has not been produced or reviewed by Cebr. We are therefore unable to comment on this figure.