COMMENT
Your Household Bills Total £679,000!

By Cliff D'Arcy
January 19, 2006

According to a new study, running the average UK household costs more than £679,000 over the course of a lifetime.

The report, from investment group Clerical Medical, reveals that we spend an average of £11,200 a year on bills over 60½ years, or close to £950 a month. The firm interviewed three thousand adults in December to find out how our bills add up:

• Predictably, our largest bill is for accommodation, with the mortgage or rent accounting for £313,000, or £5,200 a year. Londoners pay the most for accommodation, at a lifetime cost of £440,000, compared to just £157,000 for Northern Ireland and £231,000 in Wales.
• Food/shopping bills take second place, at £222,000 (£3,700 a year).
• Council Tax accounts for a further £67,000 (£1,100 a year).
• Utilities (the combined cost of electricity, gas and water supplies) set us back over £55,000 (£910 a year)
• Landline telephone bills ring up a bill of £21,000 (£350 a year).

However, the above figures represent the bills for an average household and, as I often say, "averages invite comparisons". For example, a premium subscription to digital TV could set you back £40 a month, or nearly £500 a year. Also, Clerical Medical found that credit-card bills weighed heavy on our finances. Two-thirds of the people interviewed had a credit card, paying an average of £235 a month for the privilege of shopping on plastic (although this bill will include a fair slice of the other spending mentioned above).

This survey clearly shows that buying or renting your home is only the half of it, because general running costs and outgoings exceed our basic rent or mortgage payments. Indeed, more than nine in ten of us (91%) think that we pay too much for our household bills. Half think that Council Tax is too high, and one in ten believes that gas charges need to come down.

Alas, average housing-related expenses rose by around a sixteenth (6%) in 2004/05, according to the Halifax, and they continue to rise. As a result, Clerical Medical's survey found that a quarter of people had been unable to pay one or more bills in the past. In the last year alone, one in four has been penalised for not paying up on time, and a fifth admit to ignoring bills in the hope that they'll go away. In addition, two in five of us have caught companies overcharging us on our bills, to the tune of £50 on average. Eeek!

Clerical Medical calculates that, collectively, we spend a mammoth £274 billion each year keeping our houses in order. Given that the UK's total take-home pay came to roughly £834 billion in 2005, this suggests that we're spending about a third of our income on the above bills. So, if you'd like to hammer your household expenses, try these articles for size:

• Ten Ways To Be A Smarter Homeowner
• These Websites Make You Wealthier
• Fifteen Fabulous Money-Saving Tips.

Good luck with knocking your bills into shape!

More: We can help you to find cheaper home loans, credit cards and insurance!

Cliff owns shares in HBOS, parent company of Clerical Medical and Halifax.