Transport poverty 02 Mar 2017

Poorest families spend one pound in five on motoring

New figures reveal that the poorest car-owning households in the UK remain deep in transport poverty. 

Official data analysed by the RAC Foundation suggests that around 960,000 of the very poorest car owning-households spent about a fifth of their disposable income on buying and running a vehicle in the last financial year.

These households (with the lowest tenth of disposable income) had a maximum weekly expenditure of £194 in 2015/16.

Of this £194 disposable income figure, the average household spent £42.50 (22%) per week on the purchase and operation of a car or van.

Of the £42.50:

  • £12 was spent on fuel
  • £8.60 on insurance
  • £6 on repairs and servicing

 

The numbers are revealed in data obtained by the RAC Foundation from the Office for National Statistics (ONS). The previously unpublished figures were collected as part of the ONS Living Costs and Foods Survey (LCFS) 2016.

The LCFS 2016 showed that for all UK households – car and non-car owning – transport - including public transport - remained, on average, the single biggest area of expenditure at £72.70 per week. This is 14% of the average weekly disposable income of £528.90.

The current pump price of fuel is:

  • Petrol – 120.2p per litre (compared with 101.9p a year ago)
  • Diesel – 122.3p per litre (compared with 101.4p a year ago)

 

Therefore, to fill up an average family car with a 55 litre fuel tank it costs today:

  • Petrol - £66.10 (compared with £56.04 a year ago)
  • Diesel - £67.27 (compared with £55.77 a year ago)

 

Previous research by the RAC Foundation found that almost two thirds of people rely on a car to commute to work, with as many as three quarters of people travelling to the office by car in rural areas.

Other work by the RAC Foundation showed that 1 in 6 job adverts require applicants to be able to drive.

Steve Gooding, director of the RAC Foundation, said:

“These figures are a stark reminder of the huge financial burden running a car brings with it, especially for those least able to afford it but who still rely on being able to drive in order to access things like education, health services and employment.

“Tellingly, the amount of money spent running a car has remained high even through an era of relatively low fuel prices. But now, with pump prices 20p a litre up on their level of a year ago, the share of household expenditure spent on motoring is set to rise further still.

“As ever, the UK has some of the cheapest pre-tax fuel in Europe. But after fuel duty and VAT is added it is a different picture with about two-thirds of the pump price going to the Chancellor. Low-income motorists will also have been alarmed about changes announced this week in the calculation of the cost of insurance claims pushing up motor premiums still further.

“With the budget just days away we hope Philip Hammond will have a copy of this official data at his side to help him both to resist any temptation to increase fuel duty.”

ENDS

Contact:

Philip Gomm – Head of External Communications – RAC Foundation

philip.gomm@racfoundation.org | 020 7747 3445 | 07711 776448 | 020 7389 0601 (ISDN)

Notes to editors:

The RAC Foundation is a transport policy and research organisation that explores the economic, mobility, safety and environmental issues relating to roads and their users.

The Foundation publishes independent and authoritative research with which it promotes informed debate and advocates policy in the interest of the responsible motorist. All the Foundation’s work is available at: www.racfoundation.org  

The ONS table on expenditure on motoring for households owning a car, by disposable income decile is available here:

www.racfoundation.org/assets/rac_foundation/content/downloadables/ONS_households_with_cars_spending_on_cars_by_disposable_income_decile_201516.pdf 

A range of interactive and embeddable fuel data charts are available in the data section of the RAC Foundation website:

http://www.racfoundation.org/data

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