Consumers’ spending and saving, страница 3


       One feature of Table 4.1 which clearly indicates a rise in the standart of living is the substantial fall in the share of total spending accounted for by food. As real incomes rise, people tend to buy a greater variety of better-quality foodstuffs. But spending on food does not rise as fast as incomes, so the share of income spent on food tends to fall.

                                        Transport and vehicles

       A further indication of the rise in real incomes is the increased share of houschold spending accounted for by transport and vehicles. This is due mainly to the growth of private transport (the motor car ), at the expence of public transport.


      Housing took a very much larger share of total household expenditure in 1986 than it did in 1953 -54. Large increases in lokal authority rates are part of the explanation for this change, but the main reason in the growht in home ownership.In the early 1950s, only about 30 per cent of households were buying their houses or owned them outright. In the mid-1980s, about 60 per cent of householders either owned their homes or were buying them.

                                 Durable household goods

       As real incomes have risen, there has been a steady growth in the percentage of total spending devoted to durable consumer goods.The result is that the UK has one of the highest living standarts in the world in terms of the percentages of households that possess durable household goods ( see Figure 4.2 ).


       This has been another growth area. Spending on holidays, air travel catering services and communications all increased substantially between 1963 and 1986 ( 80 per cent of UK households now have a telephone, for example ).

                                        4.5.  Saving.

         That part of personal disposable income which is not spent is saved. Table 4.2 lists some of the major institutions which collect personal savings. There are many others. The attractions of various savings schemes are widely advertised in the newspapers, on television and in the windows of banks and other financial institutions in the main streets of our towns.

                                         Some major UK savings institutions:

The commercial banks ( e.g. Lloyds, Midland, Barclays, National Westminster ).

The Trustee Saving Banks

The Natijnal Girobank

The National Savings Bank 1 operated through

National Savings Certificates of the Post Office

Premium Savings bond J

Building Societies

Insurance companies

Pension funds

                                Why and how people save

The amounts which households saved depend mainly on the following factors.


        The main influence on personal saving is the level of disposable income, because this determines the ability to save. ( Saving cannot take place until income has risen above the level which is needed to buy the basic necessities.)

                          The social attitudes towards saving

     In some societies, saving is regarded as a good social habit, and is thought to be a sensible and correct way of dealing with part of one’s income.In other societies, this is not the case.Income is seen as something which should be spent and enjoyed when it is received, and a person who saves may be regarded as mean. Saving will obviously tend to be higher where people regard it as a good habit.

                         The desire to provide for future needs

      Many people save because we live in the world of uncertainty.They wish to build up a reserve of money which will help them cope with any misfortune which may befall them in the future ( e.g. illness or redundancy ).People also save to make theis years of retirement’ore comfortable. These reasons explain why a major part of personal saving takes the form of conributions to pension funds and insurance funds.

                              Saving for a particular objective