Lifetime cost of a UK household is over £1.8 million

coins3The average UK household will cost a total of £1,802,000 (or £29,000 a year) to run over the course of a lifetime, according to new analysis by Prudential of the ONS Family Spending Report.

The figures show that household costs fluctuate over time, with annual costs peaking at £45,000 when the head of the household is aged between 30 and 49, reflecting the costs of raising children. By comparison, pensioner household expenditure drops to £25,000 a year when the head of the household is aged between 65 and 74, and to £17,000 for those aged 75 and above.

Commenting on the figures, Vince Smith-Hughes, retirement expert at Prudential, said: “These figures are startling, showing a gulf of more than £14,000 annually between income and expenditure in the early years of retirement if the householders rely solely on the Basic State Pension. This pays just £10,310** a year currently to the average retired household. To make up the difference, pensioners will have to dig deep into their savings or personal pension plans, unless they simply choose to go without.”

“Saving as much money as possible from early in working life is key to being able to supplement the State Pension and ensure sufficient income to live a comfortable retirement. Our analysis shows that the average household spends £230,000 on recreation and £128,000 on hotels over the course of a lifetime, so by tightening their belts a little people could afford to save more towards retirement.

“Although living costs do fall as people reach their twilight years, health costs tend to increase, so the average household costs are nowhere near covered by the State Pension, even in households with two pension incomes. Seeking professional financial advice could help people to plan better to be able to meet thei

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One Comment
  1. Err… What are the pensioners spending money on to spend 25k? the figures are ridiculous.

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