According to research conducted in 2012 by the Joseph Rowntree Foundation, a couple with two children living in the UK need an annual budget of £36,800 -- equating to an average monthly budget of £2,830 -- to meet the “minimum income standard” to participate in society. This is a highly politicised subject and debate rages over what constitutes the “average” family and what constitutes a necessity.
Household goods and services
At £784.32 per calendar month, household goods and services account for the largest portion of family expenditure in the UK. The Joseph Rowntree Foundation includes childcare, cleaning, flooring, DIY, electricals, furniture, cooking equipment and telephones in this category. This figure drops by £635.76 per calendar month to £148 if you remove childcare, making it the smallest area of expenditure. However, the report assumes that a family not using childcare services relies on a single earner to provide for them, highlighting the importance of childcare to the average UK family.
Housing costs, including rent or mortgage payments, plus utility bills and contents insurance, are typically the second largest area of expenditure, according to the Joseph Rowntree Foundation study, with the average family claiming to spend a minimum of £645.62. A separate study by the letting agency group LSL Property Services put the UK national average rent at £732, as of January 2013, which illustrates the difficulties in determining an accurate average budget for the entire UK, especially with London and the South East reporting significantly higher average rents.
The average food budget is based on a couple with two children eating a healthy and nutritionally balanced diet with minimal discretionary food and drink expenditure. According to the Joseph Rowntree Foundation, a family needs to spend £106.39 a week on food and drink, which equates to £406.02 per calendar month. Included in the calculation are meat, fruit, dairy products, snacks, breakfast items and a concession for eating out once every four months. A case study by The Guardian newspaper identified a family of four that spent around £160 per month on food, but they complained that this was insufficient to fund a balanced, healthy and fresh diet.
Transport requirements differ according to the family’s lifestyle and location, but the Joseph Rowntree Foundation study assumes that the average family of four requires the use of a car which costs £261.08 a month to run. A minority of families said they required only the use of a bicycle, which worked out at a monthly average of £6.06 for parts and maintenance.
Other areas of expenditure
Other areas of expenditure included in the Joseph Rowntree Foundation report included social and cultural participation such as holidays, birthday gifts and Christmas decorations, personal items such as health care products and cosmetics and personal accessories such as bags, car seats, clocks and shoelaces.