UK city where money goes furthest and the most expensive | Personal Finance | Finance

Brits are spending yet more on bills, and Brighton, Norwich and Bristol all rank higher than London for the price of essential costs, with one East Midlands city topping the charts as the cheapest place to live.

Overall, bill payers are spending £55.26 a day – an average increase of 8% since last year, according to the annual MoneySuperMarket Household Money Index (HMI).

Although Londoners are technically forking out the most on essential costs, with outgoings above £2,000 a month for the first time since the HMI launched in September 2023, it ranks ‌sixth in the UK for the percentage of income households are spending on bills, at 66%.

Households paying the smallest percentage of their towards bills are those in Belfast, where just 58% goes towards essential costs.

The latest index shows the gap between UK cities when it comes to spending on household bills – as the average person in Brighton spends 72% of their income on bills and outgoings – making the coastal city the most expensive place for running costs.

HMI tracks what people are spending across 31 categories – from insurance, mortgages and utilities to subscriptions and groceries – on a quarterly basis.

The average Brit now spends £55.26 a day on these costs – the equivalent of £1,657,67 a month. This marks an 8% rise since September 2024, when the daily spend was £51.13, and a 3% jump from 2023, when people spent £53.65 per day.

After a year of falling household costs, household expenses are rising again. However, wage growth means that the share of income spent on household bills has dropped from 69% to 64% over the same period.

From September last year, the average person’s disposable income rose from £684.70 to £900.91 (32%), meaning people have more than £200 extra to spend or save a month.

The report reveals many people are using this extra money to improve their long-term financial situation. Consumers reported year-on-year increases in spending on loan repayments (+4%), credit card repayments (+14%) and private and workplace pensions (+17%) since 2024.

Despite the overall rise in costs, respondents did make savings on some essential spending. Household expenditure on energy fell by 3%, from £109.10 a month to £105.90, with other savings in mobile phone contracts or top-ups and life insurance.

Consumer spending on TV licences fell from £30.40 to £20.40, with fewer people opting for a TV licence and people paying for on-demand subscriptions.

While some costs fell, others rose, such as childcare/school costs, vehicle fuel, mortgages, groceries and pet costs.

Lis Barton, from MoneySuperMarket, said: “As spending on household bills climbs, it’s more important than ever for people to compare prices regularly to ensure they’re getting the best deal.

“From energy and broadband to mobile contracts and insurance, savings made from switching could help offset rising costs in other areas, such as groceries and fuel.”