Households have forked out £14k extra on bills since 2021 – as weak consumer spending holds back growth

• Spiralling mortgage, loan, energy and water bills have left many households spending an average £2,792 extra a year – or £13,961 since 2021.

• The UK has seen the lowest growth in consumer spending in the G7 since before the pandemic.

• Addressing spiralling living costs is essential to boosting household incomes, improving consumer spending and strengthening growth.

The TUC has today (Thursday 15 October) called on the Chancellor to take urgent action in the Budget to bring down living costs, as spiralling household bills have left households paying £13,961 more in average bills over the last five years– or £2,792 a year.

A serious plan to improve household incomes is needed to put working people back at the heart of growth, the TUC says.

The union body is calling for a series of measures in the Budget to give households the breathing space needed to get Britain spending again, starting with a social energy tariff to help lower- and middle-income households with their bills.

The TUC is also urging the Chancellor to deliver more support for young people, families, and the poorest households. These measures could be funded by increasing the bank surcharge, raising up to £15 billion a year, and increasing Capital Gains Tax, which could raise up to £19.7 billion a year by 2030.

Eye-watering bill rises

TUC analysis of ONS figures finds that over the five years since 2021 households with mortgages have spent on average £9,034 extra on mortgage payments (£1,806 extra a year) and those with loans have spent an extra £1,911 extra on repayments (£382 extra a year).

Average rental costs have risen at a higher rate than mortgages, meaning mortgage costs are being passed on to renters.

Households have spent on average £2,644 extra on electricity and gas bills (£529 extra a year) and £372 extra on water bills (£74 extra a year).

That means the households that face all these costs have forked out an additional £13,961 on bills on average over the last five years - an extra £2,792 a year.

Slowdown in consumer spending

Growth in consumer spending remains well behind pre-pandemic levels and is holding back GDP growth. Recent ONS figures showed that household disposable incomes have flatlined since the 2008 financial crisis.

Since the pandemic, the UK has experienced the lowest growth in consumer spending of any G7 country. Over the same period, the contribution household spending has made to growth has halved. 

This is because rising bills, interest rates, and inflation have hammered household incomes. With less money to spend, high streets and the wider British economy are suffering. Lower incomes and higher bills are slowing spending growth and limiting GDP growth.

Urgent interventions to boost incomes