THE COST OF
TOMORROW
Forecasting our future spending
EDITION 1 – FEBRUARY 2017
PLANNING | ADVISING | INVESTING
2 THE COST OF TOMORROW
Foreword by Andy Cowan
Head of Financial Planning
at Tilney
We can all imagine what sort of lifestyle we might like to
lead. But how much will it cost us? And how much money
will we need to put by in savings and investments to enable
us to comfortably fund our future lifestyles? The further
we look into the future, the less certain we may feel.
At Tilney we recognise that everyone’s future is personal
to them, which makes it personal to us. Financial security
and family life are personal. They’re not just figures, they
are family dreams and peace of mind. At Tilney, we know
there is no ‘one size fits all’ solution to financial planning.
For more than 180 years we have been helping people
achieve financial peace of mind and secure their financial
futures through our expert investment management and
financial planning.
Our new report, The Cost of Tomorrow: Forecasting Our
Future Spending, examines how much we will spend across
our lifetime and, importantly, highlights what our likely
future household spending will be once we have retired.
The amounts we will spend are astonishing and provide a
lot of food for thought. By having a realistic view on what
our futures may cost, we can ensure we are managing our
savings and investments sufficiently now, to be able to
support our future dreams and ambitions.
A LIFETIME OF SPENDING 3
Introduction
As we enter the workplace, grow our families, build our careers, and then
prepare for retirement, we also make choices that allow us to live the
lifestyle we want. During our working years, while much of our income
funds our daily living, we have to be able to put aside savings and make
smart investment decisions that will in time come to provide an income
for our retired years. That money needs to fuel our day-to-day spending
on household basics, but it also needs to support our ambitions and dreams
for the nicer things in life.
The Cost of Tomorrow: Forecasting Our Future Spending maps a typical
lifetime’s spending based on today’s prices and spending patterns. It looks at
how much we in the UK spend as a household on expenses such as housing,
utilities, clothing, food, entertainment and holidays during different stages
of our lives, and how these spending totals and patterns change throughout
a lifetime. Specifically, the report provides us with some interesting reading
when it comes to retirement, highlighting how much households will still
spend annually once they have left their working life behind. Whilst spending
in certain areas is obviously reduced, retirees are enjoying greater spending
on entertainment, recreation and holidays. Of course, in reality, living
standards tend to grow over time, and the things we spend our money on
change with trends and developments in technology, but even without that
crystal ball, this report still gives us fascinating glimpses of our likely future
story – and its cost.
We have also asked people what they think their future holds, their
aspirations, the opportunities, and what they see as challenges to their
future wealth, and we consider some of the steps they can take now to
ensure their savings and investments are able to fuel those dreams.
We hope you enjoy reading about how your own tomorrow might look.
4 THE COST OF TOMORROW
Executive Summary
Part 1 – A lifetime of spending
• Spending habits evolve over our lifetimes, according to lifestyle changes
and household size
• People under the age of 30 see their spending dominated by housing
costs, while having fun makes up just one fifth of spending. In contrast,
those aged 65-74 spend a quarter of their total spending on having fun
• The average 20-year-old will see household spending of £1.9m over the
course of their lifetime; higher earning households (the top 25%) will
spend a total of £2.4m
• The average 50-year-old will have already spent £1m in today’s money.
A third of this will have been spent on housing costs, whilst holidays,
restaurants and entertainment will have cost them £203,000
• At the same stage in life, the wealthiest 25% will have spent £1.4m, with
much higher spending on leisure activities (£342,000)
• After the age of 50, those in the wealthiest 25% of households can expect
to spend another £1.4m during the rest of their life – half a million pounds
more than the average household
• From the age of 65, the top quarter can expect to enjoy spending £683,000;
the average over-65 household £420,000
• Housing costs diminish with age – so a typical retired household can
expect to spend £99,500 on having fun, £41,000 of which is on holidays
• One in 16 retired households will enjoy £1m of spending over their future
lifetime, and is able to devote disproportionately more to the finer things
in life
Part 2 – Aspiration and spending
• People anticipate their lifestyles will improve as they get older; 36% of
non-retirees expect their lifestyle to improve; a further 48% expect to
maintain their current living standard
• And retirees are seeing this in action. Three times as many say they have
seen their lifestyle improve rather than deteriorate since retiring
• Leaving behind the stresses of the workplace, and having more time, were
the top reasons for retirees’ lifestyles improving; having sufficient money
to spend on fun was third
• Of those who felt living standards had deteriorated, nearly half blamed
this on having less money to spend on things they enjoy
A LIFETIME OF SPENDING 5
• For over-45s, holidays dominate their future aspirations; and the average
household in retirement is living out these dreams spending £41,000 on
holidays – half of this on foreign travel
• Worryingly those yet to retire underestimate the amount they will actually
spend in later life by almost £100,000
Part 3 – Financing your future spending
• A typical household will spend £420,000 in retirement in today’s prices.
They can expect to spend £26,500 every year until they reach 75, dropping
to just below £16,000 per year after the age of 75
• Assuming a proportion of retirees’ income is covered by the state pension,
an average retired household will still need to find a further annual income
of £14,100 to sustain their spending levels
• For wealthier households, aspirations and spending totals are significantly
greater. The annual spend in today’s money is £43,300 for the first ten
years, dropping to just £25,500 after the age of 75
• This leaves a significant post-tax income shortfall of £30,900 every year
between the ages of 65 and 74, after accounting for a state pension
Conclusion
• Having spent £1m already, we still have half our lifetime’s spending to go
beyond the age of 50
• But people underestimate how much they will spend in retirement,
running the risk of not being able to maintain their current standard of
living, let alone fulfil retirement aspirations
• The wealthiest quarter will need to source an annual income of £30,900
between the ages of 65 and 75, after state pension income is factored in
• Financial planning is vital; people need to think about the future and
ensure they have a portfolio of suitable savings and investments set in
place early enough in their lifetime to generate a sufficient pot of money
(after tax) to support spending levels in retirement, support their families
and leave an inheritance
• Having access to the specialist financial planning expertise that is
required to navigate the maze of regulatory and tax changes and protect
against rising inflation levels, is the only way to ensure standards of living
in retirement are met, and that retirement aspirations, whatever they may
be, can become a reality
6 THE COST OF TOMORROW
PART 1
A lifetime
of spending
The average household
will spend
£1.9M
£2.4M
over a lifetime,
ONE
in 16 households
will enjoy a
£1M
retirement
for higher earners
Spending on fun
BY 50
JUMPS TO A QUARTER
the average household
has spent its first
£1M
of the household budget between
65 74
and
A LIFETIME OF SPENDING 7
The lifecycle of spending
As lives change, so household spending habits naturally change
too. In their 20s most people in Britain are getting their careers
going and starting families. Spending is relatively high in this
stage, mainly reflecting the costs of setting up home. As incomes
rise and families grow, so spending grows too, peaking between
30 and 49 years old. Nests then gradually empty, and mortgages
reduce, and outgoings begin to fall. People start preparing for their
retirement, and this is the time when they will typically spend
the least, particularly in the latter days. Higher income and lower
income groups alike share this broad pattern through life, though in
absolute terms, the wealthier obviously spend more at each stage
than others, and most retirees are enjoying a comfortable standard
of living.
“Having fun makes
up just one fifth
of under-30s’
spending but one
quarter of those
aged 65-74”
Annual spending in each life stage
£60,000
Top quarter
£50,000
Average
household
£40,000
£30,000
Bottom quarter
£20,000
£10,000
£0
20-29
30-49
50-64
65-74
75+
Lifetime average
The evolution of spending
At each phase of life, the complexion of spending is very different.
Housing, for example, takes up a steadily smaller share of the
household budget over time. A third of under-30s’ outgoings is
devoted to keeping a roof over their heads, compared to a little
over a quarter among over-65s. And though the younger groups
might think they are having more fun than their older peers,
entertainment, eating out and holidays account for an ever greater
share of spending until people reach 75. Having fun makes up just
one fifth of under-30s’ spending but one quarter of those aged
65-74. The older group spends more on it in absolute terms too.
8 THE COST OF TOMORROW
Share of annual household spending – selected life stages
35%
30%
25%
20-29
“An average
20-year-old will
spend £1.9m over
the course of
their life”
50-64
65-74
20%
15%
10%
5%
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A lifetime of spending
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Millions
This all adds up over a lifetime. An average 20-year-old will
spend £1.9m over the course of their life (in today’s prices).
This is for his or her whole household, so it will include
any money their partner spends if they have one, and
any outgoings related to their children.
£2.0
£1.5
£1.0
Someone in the top quarter of UK households by income
will spend much more. Wealthier 20-year-olds on average
can expect to spend £2.8m in their lifetime, half as much
again as the average. But even those in the bottom quarter
will spend over £1.1m in total.
By age 50, the average householder has already just spent
their first £1m in today’s prices. A third of this has gone on
housing and utilities, £45,000 on clothing and shoes, and
£89,000 on food, these essentials adding up to about 45%
of all spending. Holidays, restaurants and entertainment
have made up £203,000, or one fifth of the total. The
average household reaches the lifetime-spending halfway
mark at the age of 48.
£0.5
£0
20 25 30 35 40 45 50 55 60 65 70 75 80 85
Top quarter
Average household
Bottom quarter
“By age 50,
the average
householder has
already just spent
their first £1m in
today’s prices”
A LIFETIME OF SPENDING 9
Meanwhile, by the age of 50 someone in the top quarter has
splashed £1.4m, two fifths more than an average household.
38% (£550,000) of this has been carved out for housing, clothing
and food, a much smaller share of their overall spending than the
average, though not surprisingly somewhat more in absolute cash
terms. With their higher disposable incomes, a greater share of the
top quarter’s spending has been on leisure activities: a quarter of
their outgoings (£342,000) has been on entertainment, holidays
and eating out, three fifths more than an average household.
Interestingly, they have spent £70,000 more on transport, most
of which is on buying and running cars.
Cost of the future – aged 50
£0.4
Average
Top quarter
Bottom quarter
Millions
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The wealthier quarter has in fact only done half a lifetime’s
spending by the age of 50. Beyond 50, the typical top-quarter
household can still expect to spend another £1.4m in today’s
prices, half a million pounds more than the average. Not only is this
focusing more intensely on planning for retirement, but its standard
of living is steadily pulling further ahead of the average too.
Between 50 and 64, they will spend £708,000, 1.5 times as much
the average household.
“Beyond 50, the
typical top-quarter
household can still
expect to spend
another £1.4m”
10 THE COST OF TOMORROW
65+ – the wonder years
Top quarter spending v average spending – multiple
From the age of 65, when most
people are retiring, the top
quarter can still expect to enjoy
spending of £683,000, almost
two thirds more than the average
over-65 household’s £420,000
cost of retirement. But in both
cases, how their spending is
apportioned across household
expenses is changing markedly.
20-29
30-49
50-64
65-74
75+
Lifetime
1.30
1.35
1.40
1.45
1.50
1.55
1.60
1.65
Millions
Average household – over-65 spending
Food & drink (ex alcohol) £52,000
Alcohol & tobacco £10,000
Clothing & shoes £10,000
Housing & utilities £113,000
Household goods & services £28,000
Health & personal care £19,000
Transport £41,500
Telephone & internet £11,000
Entertainment & recreation £36,500
Restaurants & cafes £22,500
Holidays £41,000
Other £34,000
Top quarter – over-65 spending
Food & drink (ex alcohol) £79,500
Alcohol & tobacco £15,500
Clothing & shoes £22,000
Housing & utilities £145,500
Household goods & services £46,500
Health & personal care £38,500
Transport £81,500
Telephone & internet £15,000
Entertainment & recreation £66,000
Restaurants & cafes £42,500
Holidays £74,000
Other £57,500
“From the age of
65, a typical
household can
expect to spend
£99,500 on having
fun, of which
£41,000 is
on holidays”
A LIFETIME OF SPENDING 11
As housing costs consume a smaller and smaller portion of the
budget, people are able to enjoy their money more. From the age of
65, a typical household can expect to spend £99,500 on having fun,
of which £41,000 is on holidays. More than half of that is spent on
foreign travel. By comparison, keeping a roof over their heads will
cost only a little more than their leisure pursuits.
The wealthier quarter of over-65s will spend slightly more on their
homes, but almost twice as much (£182,000) having fun, of which
an astonishing £74,000 will be on holidays. They are still spending
significantly on motoring too: of their £81,500 transport budget,
£79,000 is devoted to buying and maintaining their cars almost
twice as much as their age group overall, suggesting they are
replacing their vehicles regularly.
One in 16 retired households will enjoy £1m of spending over their
future lifetime. This more privileged group has far more disposable
income, which it devotes disproportionately to the finer things
in life. In fact, at £410,000 the top 6% of over-65s will spend
approximately the same on entertainment, holidays, restaurants
and cars as the average retired household will on everything.
One key difference for this group is health and personal care.
Not only are they more likely to devote resources to private medical
treatment, but since their later-life care costs are means-tested,
they must also fund these, should they need them, without support
from the state.
“One in 16
households will
enjoy a £1m
retirement”
Over 65 future lifetime spending – by region
£550,000
£500,000
£450,000
£400,000
£350,000
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12 THE COST OF TOMORROW
In later life, the lowest income households become harder to
compare to the average and higher income groups. This is because
they are much more likely to be single-person households, and so
have lower incomes and lower spending. Among over-65s, there
are only just over 1.1 adults in each household on average in this
lower income group, well below the average for that age. Their future
lifetime spending is £242,000.
Regional patterns broadly reflect income levels around the country.
Retiring Londoners are the only group where the average household
will spend more than £500,000, though there are additional living
costs to contend with in the capital. Meanwhile, those in the North
East spend the least.
A LIFETIME OF SPENDING 13
PART 2
Aspiration
and spending
84%
expect their
lifestyle
will be the
SAME OR
BETTER
in retirement
People most look
FORWARD TO HOLIDAYS
PEOPLE UNDERESTIMATE
actual retirement spending
by almost
£100,000
in retirement, and will spend
£41,000 on them
14 THE COST OF TOMORROW
Planning for later life can seem like a complex undertaking.
We surveyed 2,000 people aged over 45 to gauge their lifestyle
aspirations, comparing the views of those still working to those who
have retired, as well as against actual spending patterns in later life.
Reasons for lifestyle improvement
70%
60%
50%
40%
30%
20%
10%
0%
I have more
money to
spend on
things I enjoy
I have enough
money to
spend on
things I enjoy
I have more
time to spend
on hobbies
and passions
My health has
improved
I no longer
have stress
associated
with work
An improving lifestyle
Most respondents are rather optimistic. 36% of those who haven’t
yet retired expect their lifestyle to improve; a further 48% expect to
maintain their current living standards. The experience of over-65s
can reassure them. Three times as many retirees say they have seen
their lifestyles improve rather than deteriorate since they retired.
Crucially this is because people are able to spend money on the
things they enjoy, which Part 1 shows takes up a larger share
of later-life spending. While leaving behind the stresses of the
workplace (62%), and having more time to spend on hobbies
and passions (47%), were the top reasons for retirees’ lifestyles
improving, having sufficient money to spend on things they enjoy
was not far behind (45%). One fifth even cited an increased amount
that they had to spend on hobbies and pursuits, as a reason for
their lifestyle improving.
“Those approaching
retirement see
holidays as an
important part of
their future”
A LIFETIME OF SPENDING 15
While money is quite naturally not the most important aspect of
retirement, a lack of sufficient income can be a barrier to securing
that lifestyle for some. Of those who felt their living standards had
deteriorated in later life, nearly half (49%) noted it was due to having
less money to spend on things they enjoy, while 44% simply stated
they did not have enough money to support their desired lifestyle.
Lifestyle changes in retirement
My lifestyle has improved 39%
My lifestyle has deteriorated 13%
My
lifestyle has neither
improved nor deteriorated 48%
Evolving aspiration
What we want in our lives, and what we will want in the future,
evolve with our circumstances. Not only do holidays and spending
on leisure activities remain top priorities as people retire – the
importance placed on these increases with age.
For over-45s who haven’t retired, holidays dominate their view of the
future; 37% see multiple trips abroad as important goals, and 28%
say the same of staycations. Those in retirement place holidays as
an important part of their future too, with 44% and 43% of retirees
saying the same about foreign and UK trips. It’s hardly surprising,
then, that Part 1 shows over-65s are splashing out on average
£41,000 on holidays.
Regularly eating out or enjoying cultural pursuits such as theatre
trips also increases in importance, climbing from 25% among those
who haven’t retired, to 37% among those who have. Freed from
the shackles of the working day, and often with more disposable
income, volunteering or donating to charity also becomes a more
prominent lifestyle goal, cited by 23% of retirees compared to just
one in ten of those who still work.
“36% of those who
haven’t yet retired
expect their lifestyle
to improve after 65”
16 THE COST OF TOMORROW
How aspirations evolve
Top aspirations
Non-retirees
Retirees
One or more holiday(s) abroad each year
37%
44%
One or more holiday(s) within the UK each year
28%
43%
Regularly eating out at restaurants, going to
museums, art galleries, cinema or theatre
27%
37%
Owning a home
25%
34%
Take up or continue a sport/hobby
19%
21%
Update car/motorbike regularly
16%
20%
Planning my estate so I can pass money to
my children
15%
23%
Move to a part-time job
15%
1%
Financially supporting children’s/
grandchildren’s house purchase
12%
15%
Make charitable donations/volunteer
10%
23%
Regularly going to support sports team
7%
5%
Owning a second home/holiday home
6%
4%
Move abroad permanently
6%
3%
Afford monthly membership to the gym
6%
8%
Enrolling in a further/higher education
course/learn a new skill
5%
5%
Find employment
5%
1%
Increase spending on luxury items
2%
2%
Other
2%
6%
A LIFETIME OF SPENDING 17
Expectation versus reality
One of the key challenges for saving enough to meet future goals is
understanding how much is needed in total to pursue their chosen
lifestyle. In reality people are underestimating their likely standard
of living in retirement. Those who have not yet retired underestimate
their total retirement spending by almost £100,000. On average,
they expect to spend £16,456 per year, a total spend of £325,800.
In reality a typical household, as we have seen, will spend £420,000.
If this unrealistic forecasting translates into poor financial planning,
people risk sleepwalking into a frugal retirement.
Underestimating spending on fun
People are pretty accurate in their assessment of roughly how they
will spend their money. Housing costs are correctly identified by the
majority (51%) as a top item of expenditure in retirement, followed
by spending on food and drink (37%) then holidays (33%) and
transport (23%). This broadly matches the reality.
But when it comes to accumulating goods versus enjoying
experiences, people overestimate their likely appetite for things and
underestimate their likely spending on fun. A quarter incorrectly
see household goods and services as one of the three highest costs
for later life. Meanwhile, just 9% say entertainment and recreation
spending will be among the activities they will spend the most on,
and 5% say the same about eating in restaurants. In reality, these
two pursuits will account for twice the spending of household goods
and services. For many, this will a mean a more active or enjoyable
later life than they anticipate, but also that they need to account for
the amount they will end up spending on the finer things in life.
“Those who have
not yet retired
underestimate their
total retirement
spending by almost
£100,000”
18 THE COST OF TOMORROW
PART 3
Financing
your future
spending
Top-quarter earners
AFTER STATE BENEFITS,
a typical household needs
£14,100
of retirement income
to spend
£26,500
every year
WILL NEED PRIVATE
retirement income of
£30,900
to spend
£43,300
every
year
A LIFETIME OF SPENDING 19
So how are the UK’s households financing their lifestyles? Naturally,
working-age people are mainly relying on their earned income. But
to continue to fund the essentials, the fun and the luxuries once
they have stopped working, people need to plan ahead.
A typical household will spend £420,000 over the course of their
retirement in today’s prices. Spending tends to be front-loaded,
averaging £26,500 in the first few years, before dropping to a little
below £16,000 after the age of 75. Retirees typically live as a couple
in the early years, and are more aspirational and active. Those over
75 are more likely to live alone, and typically have quieter lifestyles.
A proportion of retirees’ spending needs is covered by the state
pension, but a couple will still need to find £14,100 per year on
top of their state pension to meet the average spending level and
sustain their standard of living.
For the wealthiest quarter of households, whose aspirations and
spending is significantly greater, the annual spending total is much
greater and they must rely much more on private resources to fund
their lifestyles. They spend £43,300 a year for the first ten years, and
are still enjoying annual expenses of £25,500 after the age of 75.
Their income shortfall is as much as £30,900 per annum between
the ages of 65 and 75, after the basic state pension is taken into
account. Again, it’s important to remember that these spending
totals are based on the cost of things today. Prices typically rise
over time, so when planning future income requirements so far in
advance, it’s important to ensure that investment returns are able
to negate the eroding impact of inflation.
Of course, retirement pots are not just intended for spending. Many
may wish to leave an inheritance for their children, support their
families to buy their own homes, or have other financial goals to
achieve. People also need to take account of inflation, to ensure
they can protect their standard of living over time.
“A typical household
will spend £420,000
over the course of
their retirement in
today’s prices”
20 THE COST OF TOMORROW
People not only need to understand what the cost of their day-today spending might look like in retirement, they need also to think
about how they will finance those dreams and aspirations that sit
outside basic household expenses. For most, earnings (and income)
will peak in the immediate years before retirement, therefore people
need to consider how they will support the standard of living they
have become accustomed to as they retire, and how they will fuel
their household expenses and spending once their regular earnings
have disappeared.
We must of course save enough money, but also save it in the right
places. In order to make up the spending shortfall after the state
pension (and not accounting for the wealth locked down in fixed
assets such as housing), pre-retirees need to ensure they have a
suitable portfolio of savings and investments to deliver enough
income to support retirement spending. Income will come from a
range of sources, including occupational pensions, drawing down
on investments saved over the years, and even from inheritance.
Some people may downsize their home, releasing equity in the
process, or look at equity release plans to supplement their income.
Ensuring capital is protected from the ravages of inflation is vital.
Simply saving into a building society account would require far more
to meet our income needs over a long retirement than investing
that capital in assets where it can continue to grow, even as you
gradually consume it.
“Pre-retirees need
to ensure they
have a suitable
portfolio of savings
and investments
to deliver enough
income to support
retirement
spending”
A LIFETIME OF SPENDING 21
Conclusion
With roughly half our lifetime’s spending still to go beyond the age of 50,
planning for how we will sustain our standard of living when we are no longer
earning is crucial.
Whilst no two people’s lifetime aspirations are the same, and retirement
goals – not to mention personal and financial circumstances – are unique
to each individual, there are broad patterns common to most households as
they enter later life, that can help inform those thinking ahead and planning
their retirement.
The whole arc of a lifetime’s spending shows not only the huge sums we
consume, but also how our needs and tastes change over time. As we age,
the focus of our household expenditure changes; retirees typically free up
money from housing costs to spend on enjoying life. Today’s retirees are
spending surprisingly substantial sums on the pursuit of recreation and
achieving their desired lifestyle. They are living well, and those coming
behind will want to ensure that they can too.
Our findings show just how much people underestimate how much they
will need to spend in retirement. And whilst on the one hand, the standard
of living and quality of life they are set to experience in retirement may
therefore actually come as a pleasant surprise, without sufficient financial
planning, future aspirations and dreams may be unattainable.
As our research demonstrates, retirement is one of the most rewarding
periods of life, when people have the opportunity to spend both the time and
the money on the lifestyles they want. But it comes at a cost.
Financial planning is central to making the cost of tomorrow affordable.
Taking action early and having a clear vision and plan will help to ensure you
have sufficient retirement income to maintain your standard of living, and
most importantly, turn your retirement aspirations, whatever they may be,
into a reality.
At Tilney, our Financial Planners understand that each individual has their
own picture of retirement, and can provide the advice and expertise to
ensure everyone’s future story makes for a good read.
22 THE COST OF TOMORROW
Appendix 1
How much will you spend over your lifetime?
Average household
20
30
40
45
50
55
60
65
70
75
80
90
Food & drink (ex alcohol)
£186,216
£162,136
£129,502
£113,358
£97,442
£81,860
£66,622
£51,957
£39,623
£28,092
£20,627
£9,930
Alcohol & tobacco
£38,831
£33,974
£27,499
£24,289
£21,117
£17,279
£13,496
£9,806
£7,100
£4,523
£3,321
£1,599
Clothing & shoes
£76,864
£62,919
£47,417
£39,697
£32,021
£25,452
£18,948
£12,551
£8,812
£5,223
£3,835
£1,846
Housing & utilities
£568,522
£470,041
£356,900
£300,644
£244,807
£200,154
£156,129
£113,152
£81,517
£51,350
£37,706
£18,151
Household goods & services
£113,210
£96,673
£76,431
£66,396
£56,477
£46,828
£37,351
£28,162
£20,919
£14,078
£10,337
£4,976
Health & personal care
£58,661
£51,724
£42,500
£37,950
£33,483
£28,527
£23,696
£19,074
£14,487
£10,192
£7,484
£3,603
Transport
£205,389
£176,823
£137,448
£117,858
£98,399
£79,174
£60,146
£41,443
£28,487
£15,989
£11,740
£5,652
Telephone & internet
£50,113
£40,863
£31,882
£27,428
£23,024
£18,849
£14,749
£10,770
£8,293
£5,988
£4,397
£2,117
Entertainment & recreation
£144,877
£127,482
£101,770
£89,009
£76,376
£62,802
£49,420
£36,354
£25,726
£15,543
£11,413
£5,494
Restaurants & cafes
£114,516
£90,350
£69,736
£59,490
£49,328
£40,184
£31,164
£22,351
£16,095
£10,128
£7,437
£3,580
Holidays
£156,979
£139,118
£113,124
£100,218
£87,433
£71,648
£56,044
£40,742
£27,554
£14,788
£10,858
£5,227
Other
£174,377
£136,789
£104,941
£89,123
£73,448
£60,046
£46,857
£34,022
£25,450
£17,373
£12,757
£6,141
£893,353
£732,804
£574,622
£420,385
£304,064
£193,266
£141,912
£68,314
Grand total
Top quarter
of households
£1,888,555 £1,588,893 £1,239,151 £1,065,463
20
30
40
45
50
55
60
65
70
75
80
90
Food & drink (ex alcohol)
£251,432
£224,493
£182,662
£162,034
£141,790
£120,346
£99,479
£79,571
£62,626
£47,024
£34,529
£16,622
Alcohol & tobacco
£50,520
£44,497
£36,929
£33,192
£29,519
£24,686
£19,949
£15,370
£11,466
£7,785
£5,716
£2,752
Clothing & shoes
£127,335
£106,017
£81,164
£68,793
£56,494
£44,885
£33,385
£22,068
£15,383
£8,954
£6,575
£3,165
Housing & utilities
£665,155
£545,008
£419,456
£357,050
£295,138
£244,388
£194,377
£145,601
£102,173
£60,474
£44,405
£21,376
Household goods & services
£185,591
£162,708
£126,903
£109,144
£91,578
£76,178
£61,067
£46,436
£34,664
£23,566
£17,304
£8,330
Health & personal care
£101,650
£91,066
£75,247
£67,471
£59,873
£52,404
£45,201
£38,443
£29,797
£21,772
£15,987
£7,696
Transport
£362,503
£313,815
£249,106
£216,962
£185,097
£150,036
£115,395
£81,454
£57,394
£34,315
£25,197
£12,129
Telephone & internet
£66,540
£53,878
£42,812
£37,327
£31,907
£26,199
£20,588
£15,138
£11,419
£7,927
£5,820
£2,802
Entertainment & recreation
£256,115
£227,072
£181,193
£158,427
£135,893
£112,100
£88,655
£65,790
£46,696
£28,413
£20,863
£10,043
Restaurants & cafes
£201,948
£161,603
£126,404
£108,917
£91,580
£74,933
£58,511
£42,464
£30,148
£18,357
£13,479
£6,489
Holidays
£262,234
£233,722
£191,578
£170,671
£149,986
£124,151
£98,647
£73,695
£49,972
£27,020
£19,841
£9,551
£287,380
£224,740
£173,539
£148,105
£122,891
£100,692
Other
Grand total
Bottom quarter
of households
£2,818,404 £2,388,619 £1,886,992 £1,638,092 £1,391,746 £1,150,997
£78,825
£57,510
£41,909
£27,083
£19,887
£9,573
£914,078
£683,540
£493,648
£312,689
£229,603
£110,526
20
30
40
45
50
55
60
65
70
75
80
90
Food & drink (ex alcohol)
£125,848
£107,356
£84,795
£73,630
£62,619
£52,790
£43,192
£33,978
£26,126
£18,812
£13,814
£6,650
Alcohol & tobacco
£27,917
£23,991
£18,803
£16,222
£13,659
£10,905
£8,178
£5,494
£3,791
£2,148
£1,577
£759
Clothing & shoes
£35,914
£28,985
£21,774
£18,187
£14,624
£11,700
£8,813
£5,986
£4,428
£2,954
£2,169
£1,044
Housing & utilities
£482,601
£415,749
£312,708
£261,464
£210,589
£170,820
£131,605
£93,314
£68,640
£45,260
£33,233
£15,998
Household goods & services
£54,674
£45,822
£37,160
£32,872
£28,644
£23,244
£17,932
£12,767
£9,877
£7,192
£5,281
£2,542
Health & personal care
£25,563
£22,790
£18,946
£17,050
£15,191
£12,913
£10,688
£8,554
£6,410
£4,392
£3,225
£1,552
Transport
£77,931
£68,836
£51,782
£43,288
£34,836
£27,307
£19,843
£12,485
£8,786
£5,236
£3,844
£1,851
Telephone & internet
£32,736
£27,451
£21,232
£18,148
£15,101
£12,439
£9,831
£7,312
£5,761
£4,334
£3,182
£1,532
Entertainment & recreation
£59,685
£51,841
£41,672
£36,632
£31,651
£25,972
£20,382
£14,939
£10,972
£7,211
£5,295
£2,549
Restaurants & cafes
£48,070
£36,730
£28,093
£23,803
£19,552
£15,834
£12,173
£8,610
£6,616
£4,757
£3,493
£1,682
Holidays
£76,454
£68,422
£55,512
£49,103
£42,755
£34,184
£25,705
£17,378
£12,335
£7,505
£5,511
£2,653
Other
£98,329
£81,831
£62,822
£53,396
£44,075
£36,418
£28,919
£21,682
£17,104
£12,893
£9,467
£4,557
£1,145,722
£979,805
£755,298
£643,796
£533,296
£434,527
£337,261
£242,499
£180,844
£122,694
£90,092
£43,369
Grand total
A LIFETIME OF SPENDING 23
Spending by 50
Bottom quarter
Average
Top quarter
Food & drink (ex alcohol)
£63,229
£88,773
£109,643
Alcohol & tobacco
£14,258
£17,714
£21,000
Clothing & shoes
£21,290
£44,843
£70,841
Housing & utilities
£272,011
£323,715
£370,017
Household goods & services
£26,030
£56,734
£94,013
Health & personal care
£10,372
£25,178
£41,778
Transport
£43,095
£106,990
£177,406
Telephone & internet
£17,636
£27,090
£34,632
Entertainment & recreation
£28,034
£68,501
£120,222
Restaurants & cafes
£28,518
£65,188
£110,369
Holidays
£33,699
£69,546
£112,249
Other
£54,254
£100,930
£164,489
Grand total
£612,426
£995,202
£1,426,658
Appendix 2
Average household
lifetime spending –
the future at each age
20
30
40
45
50
55
60
65
70
75
80
90
North East
£1,574,655 £1,324,801 £1,033,190
£888,371
£744,867
£611,004
£479,114
£350,512
£253,525
£161,143
£118,325
£56,959
North West
£1,720,921 £1,447,858 £1,129,160
£970,889
£814,056
£667,758
£523,617
£383,070
£277,075
£176,111
£129,316
£62,250
Yorkshire and The Humber
£1,660,130 £1,396,713 £1,089,273
£936,593
£785,300
£644,170
£505,121
£369,538
£267,287
£169,890
£124,748
£60,051
East Midlands
£1,822,607 £1,533,409 £1,195,879 £1,028,257
£862,157
£707,215
£554,557
£405,705
£293,446
£186,517
£136,957
£65,928
West Midlands
£1,674,499 £1,408,802 £1,098,701
£792,097
£649,746
£509,493
£372,737
£269,600
£171,360
£125,827
£60,571
East
£1,991,714 £1,675,684 £1,306,837 £1,123,662
£942,151
£772,833
£606,010
£443,348
£320,673
£203,823
£149,664
£72,045
London
£2,270,613 £1,910,329 £1,489,833 £1,281,008 £1,074,080
£881,052
£690,870
£505,429
£365,577
£232,364
£170,621
£82,134
South East
£2,191,402 £1,843,686 £1,437,860 £1,236,319 £1,036,610
£850,316
£666,768
£487,797
£352,824
£224,258
£164,669
£79,268
South West
£1,963,714 £1,652,126 £1,288,465 £1,107,865
£928,906
£761,968
£597,491
£437,115
£316,165
£200,957
£147,560
£71,032
England
£1,920,977 £1,616,170 £1,260,424 £1,083,754
£908,689
£745,385
£584,487
£427,602
£309,284
£196,584
£144,349
£69,486
Wales
£1,637,656 £1,377,805 £1,074,527
£923,914
£774,669
£635,450
£498,283
£364,536
£263,669
£167,590
£123,059
£59,238
Scotland
£1,747,816 £1,470,485 £1,146,807
£986,062
£826,778
£678,194
£531,800
£389,057
£281,405
£178,863
£131,337
£63,223
Northern Ireland
£1,783,553 £1,500,552 £1,170,255 £1,006,224
£843,683
£692,061
£542,674
£397,012
£287,159
£182,520
£134,022
£64,515
United Kingdom
£1,888,555 £1,588,893 £1,239,151 £1,065,463
£893,353
£732,804
£574,622
£420,385
£304,064
£193,266
£141,912
£68,314
£944,699
24 THE COST OF TOMORROW
Methodology
The researchers analysed data from the latest ONS Family Spending Survey.
They defined the spending categories set out in the report and calculated
how much a household would spend at each stage of life based on the
typical life expectancy for someone of that age, also sourced from ONS.
Life expectancy for a household was calculated as the average for men and
women. Regional data was not adjusted for differing local life-expectancy
rates because of the complications of disentangling local demographics,
incomes and spending levels. This means the figures may slightly understate
spending for regions with higher longevity, such as the South East, and
slightly overstate spending for regions where people lead shorter lives, such
as Scotland.
The researchers calculated the spending for the top and bottom quarter of
households in each category according to the income characteristics of each
age group. The average is for all households.
Additional insight came from a survey of 2,007 adults aged over 45
conducted by Opinium in December 2016.
www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/compendium/familyspending/2015
Important Information
The value of investments, and the income derived from them, can go down as well as up and you
can get back less than you originally invested. This report does not constitute personal advice and
is intended purely as a representation of statistical data. If you are in doubt as to the suitability of an
investment please contact one of our advisers.
T: 020 7189 2400
E: [email protected]
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