On Average Spending on Necessities and Early Retirement...

According to the ONS’ 2022 Family Spending Survey the average-consumer spends a total of £365.85 a month on necessities.

This breaks down as:

• £116.51 on food
• £66.67 on water, gas and electricity (I up this to £110 for a single person household)
• £32.50 on clothes.
• £89.83 on council tax (altered to reflect the 25% reduction!)
• £17.91 on repair of dwelling (probably more again if you’re living on your own, but I’m being generous here!)

This is based on a household survey, and I’ve divided the monthly expenditure by 2.3 to reflect the average household size.

Now the problem with these figures is that if you’re living on your own, the figure for water, gas and electricity is probably going to have to be doubled, because you’re likely to spend just as much heating and lighting your house on your own as you would do as a couple. Also with standing water charges making up a good chunk of the cost of your water supply, that’s going to be more expensive too. Also based on personal experience I’d say that nearer £110 a month is much more accurate, probably a little conservative!

Even food and clothes seem a little on the low side, but let’s go with it for now, and you don’t save that much on food or clothing by being a single householder!

Over the course of 10 years this amounts to £43, 902 based on an average annual expenditure of £4390.20.

Despite this amount being a larger amount than the average consumer spends on consumer frivolities (hotels and the like), reducing expenditure on necessities offers much less scope for taking years off one’s retirement age!

I don’t think it’s possible to reduce expenditure compared to the average-consumer, so these remain the same. If you are going to live in a regular flat (rather than squat or live in a caravan) then council tax is simply unavoidable. The same goes for ‘maintenance of dwelling’ — swapping out light bulbs, boiler servicing, paint, all crucial!

The amount of money for food above I think is sensible… I mean you can bring it lower but it’s food! It’s so basic and crucial to quality of life. Similarly, you can grow your own, but honestly, I do that for fun, and you don’t actually save money, you end up spending probably MORE than you would buying it from the local market: compost, fertilizer, slug control, seeds, plugs, tools etc. etc.

As to Water, gas and electricity, reducing expenditure on these three must be the most commonly touted piece of advice for saving money, but this only really applies to the very wasteful. Compared to the average-consumer, there is actually very little scope for reducing expenditure on bills further, given my scenario of one person living alone in a regular (i.e. not super eco-efficient) flat. At current electricity and gas prices I think around £110 a month is about as good as you can get.

There are radical alternatives that could reduce such bills further, which I will discuss later, but all of these require significant lifestyle change.

I was initially surprised that the average-consumer only spends £32.50 a month on clothes.

However, on reflection I probably only thought this because those people who spend a lot on fashion are likely to be the most visible (because what’s the point in adorning yourself otherwise?), thus the impression on the street is of a higher average expenditure on clothing. However, if you actually pause and count, there are many times more people just wearing plain old dull clothes, which, in line with the statistics, suggests that the average-consumer hasn’t been duped by the fashion industry.

The frugal-consumer basically just avoids high-fashion items and buys whatever quality basic clothing they can get for the money. I’m also factoring in a good amount of money for functional shoes, given all the walking the frugal-consumer is likely to be doing.

In Summary…

All of the items in this section are CRUCIAL for quality of life maintenance. Despite the fact that many money saving advice sites focus on reducing expenditure on energy, for example, it strikes me that the average household is doing pretty well here.

So I’m going to say that just being average in these domains is O.K. for an early retirement strategy.

Admittedly there are more time and capital intensive strategies which could help reduce your yearly and monthly outgoings, but these are expensive and really only applicable to the privileged: those with enough land for a decent allotment, and those with enough capital for a proper solar array, for example.

Sources

The ONS Family Spending Survey.