The average UK household will rack up costs of £1,336,566 over a lifetime, according to new analysis by Prudential of the Office of National Statistics Family Spending Report.
The largest single expense is transport, costing a typical UK household £212,158 over a lifetime, or £3,416 a year.
Recreation and leisure is the second largest expense (£206,346), reflecting the high quality of life enjoyed in the UK, slightly ahead of housing – including mortgage payments, fuel and power combined which cost an average household a total of £204,408 over a lifetime.
The two least expensive costs for UK households are education and health, mainly because many of these services are provided by the state.
The average UK household spends an average of £364 a year on education, and £343 on healthcare. The cost for these two services combined stands at £43,917 over the course of a lifetime.
Annual household costs peak at £30,170 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 £20,368 a year when the head of the household is aged between 65 and 74, and to £14,175 for those aged 75 and above.
The basic state pension currently provides £10,310 a year to the average retired household, which means there’s a gulf of more than £10,000 between income and expenditure in the early years of retirement that needs to be filled by other savings or pensions.
Vince Smith Hughes, retirement expert at Prudential, said: “Although living costs do fall as people reach the latter stages of their lives, the average household costs are nowhere near covered by the state pension, even in two pensioner households. Planning ahead for retirement is an important part of being able to meet everyday living costs, as well as the much steeper costs which may occur later on in life, such as healthcare.
“Saving as much money as possible from as early as possible in your working life is a key part of helping to ensure you’ll get the income you need to live a comfortable retirement.”