If you ever wonder why you still haven’t figured how to get out of debt after so many years a new study might have the answer: it’s simply because average weekly wages have failed to keep pace with the rising cost of living. Almost everything we buy has suffered from price hikes due to inflation and profit hungry companies – particularly in the last few years.
Research by estate agents eMoov found that the cost of 20 cigarettes has increased by 4,370% over the last 40 years, the Daily Mail newspaper by 3,000%, cinema tickets by 2,133%, postage stamps by 2,067% and house prices 1,879%.
Compare those figures with average weekly wages that increased from £32 in 1974, to £517 today – an increase of 1,616%.
The cost of the average house has gone up from £9,927 to £186,544 since 1974. To place that into perspective: it means that the average worker had to work 310 weeks to cover the cost of the average house (without interest) in 1974. Today the same worker has to work 360 weeks to cover the cost of the same house. To put that differently: the monthly mortgage repayment is gobbling up an ever-increasing share of workers’ income.
While one could argue that people should be prepared to cut down on cigarettes and entertainment, housing is a basic living expense – and the study shows that it is taking up an ever growing share of the pie, leaving ordinary Britons with less disposable income.