£1.8m total cost of running a home


Families face a total bill of £1.8 million to run a home over the course of their lives, a study has found.

On top of this sum, the lifetime cost of direct taxation, including income tax and national insurance contributions, amounts to £385,000 for the average household, according to Prudential's calculations.
The lion's share of families' costs are taken up by housing, with an estimated £508,000 shelled out on expenses such as mortgages, rent, repairs, energy bills and council tax over the lifetime of a household.

Recreation and culture is the second largest expense at £230,000, reflecting the "relatively high" quality of life enjoyed by many people in the UK, the study found. This category would include spending on televisions, computers, newspapers and books, gardening, games, musical instruments and toys as well as lottery tickets, holidays, tickets to the cinema, concerts, sporting events and zoo trips. Money spent on household pets is also included, such as food and vet appointments.
Transport, including petrol, car insurance, car repairs, season tickets, taxis and flights, make up the third biggest drain on family budgets, costing households £212,000 in total. Families also fork out £177,000 on food, £128,000 on restaurants and hotels, £70,000 on clothes and almost £40,000 on alcohol and tobacco.

Prudential, which used Office for National Statistics (ONS) family spending figures as a base for its calculations, found that over the course of someone's lifetime, the squeeze is at its worst when the head of the household is aged between 30 and 49. At this age, their annual costs are £45,000 a year on average, reflecting the expense of raising children.

By the time the head of the household has reached 65, by which time they are more likely to be mortgage-free and have seen their children fly the nest, annual living costs are estimated to have dropped to around £25,000 a year.

Prudential based its findings on expectations that someone will live to be aged 80 on average. The research assumed that they will have their living costs paid by their parents until they reach 18, and they will then go on to run their own household for 62 years typically.

Households also spend £264,000 on "miscellaneous" items, including bank and building society charges, childcare costs, baby equipment and toiletries, funeral expenses, make-up, jewellery, trips to the hairdresser and toilet paper.

Education and health were found to be the two least costly outgoings, mainly because many of these services are provided by the state, the study said. Expenses such as glasses, prescription charges, trips to the dentist and nursery and university fees are included in these categories.

© 2013 Press Association
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