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The impact of 'invisible spending' on your future

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A cup of coffee here, a snack there, did you know that UK adults spend 48bn pounds on ‘invisible items’ each year[i]? Invisible items are the products that you buy but don’t necessarily budget for, such as after-work drinks or treats for children. But spending money on invisible items is quite a recent phenomenon.

The average Brit spends £948 a year on invisible costs.

ICM Research, September 2015

Post-war, scarce resources in the UK limited household consumption to strictly necessary, practical everyday items. The temptation of spending money on shop-bought lunches or on-the-go coffees was also rare. The first fast food restaurant joint only launched in the UK in 1965, while coffeehouse chains didn’t start appearing on our high-streets until the 90’s.

Over the last 30 years, the globalisation of markets facilitated a rapid rise in trade for the UK. The emergence of imported goods and services combined with the development of modern and digital advertising gave us more reasons to buy and encouraged us to spend our monthly wages quicker than ever before.

The economy also benefitted from the evolution of payment methods. The popularisation of credit cards in the 70’s and 80’s helped Brits afford to buy even more. As a result, our perception of what is necessary to us and what we now can’t live without [ii] and ‘saving money’ stopped becoming the number one priority; mass consumption was born.

What could you do with £948?

Take an all-inclusive holiday for two in Spain
For under £900, you can take a week long, all inclusive holiday in Spain for two people in the middle of July

Commute to work for over half a year
Commuting costs can really stack up, in London you could pay for a zone 1-3 travel card for nearly 7 months

Feed your family for nearly 3 months
The average household spends £83.60 a week on groceries and wastes nearly a fifth of that

Buy a new smartphone and pay your bill for a year
A brand new smartphone costs just over £600, leaving you just over £20 a month for line rental

We recently commissioned a survey about spending and saving habits, in which we discovered that 21% of the UK population have no savings, pointing to the cost of living as one of the most popular reasons for not having any money saved. The reality is more complex as over the years consumerism has taught us how to spend our money and what to spend it on.

Where does the money go?

Lunch, dinner, drinks, clothes, no matter what you fancy you can buy it instantly, which makes resisting to the urge to spend rather difficult. Our survey revealed that over half of people adopted the ‘you only live once’ motto, treating themselves whenever they want. The survey also showed that most people’s downfall is buying lunch during week days (74%) and going to the pub a few times a month (26%), with Generation Y - also known as Millennials and aged between 16-34 - most likely to spend than the older generations.

When we buy a coffee or a snack, we often don’t give it a second thought, but it’s incredible how small change can really stack up over time.

Rodney Prezeau, consumer platform managing director for Aviva

Avoiding small invisible purchases could not only make your bank account happier but could also help you afford bigger items or projects - such as financially preparing for a baby or raising a deposit to get onto the property ladder.

We’ve looked at why we should become better savers, and how a life-time of invisible items could be the key to a wealthier and happier future.

Changing our financial behaviour

Over a working lifetime we spend over £47,300 on invisible items, almost twice as much as the average UK yearly salary. By cutting back on these smaller purchases, a 20-year-old could build a £136,000 pension pot[iii].

Investing in stocks or in an ISA account could also help you make the most of your money, according to our survey 39% of the UK population already have an ISA account and 14% have stocks and shares.

Projecting ourselves into the near future can also help changing perspective towards our finances. Most people find it easier to focus on short term projects rather than long term goals, cutting down on invisible spending over the next 12 months can also have a beneficial impact on your savings.

As consumerism sometimes influences the way we spend our time and money, we easily lose sight of our finances. Being fully aware of what we spend our money on can help gain more control over our finances, making saving easier. If you’re not sure where to start, we have some tools that could help you start planning your finances.

Step 1: Understanding your spending

Before you can start thinking about saving you need to understand what your spending. Work our how much your wasting on 'invisible spending'.

Find out more

Step 2: Setting yourself a budget

The first step in the right direction is a budget. Our planner helps you work out how much your spending and where you can start to make savings.

Find out more

Tools & calculators

Use our handy tools and calculators to help you plan for your future.

Pensions explained

Puzzled by pensions? Get the lowdown on everything you need to know.


Already have a pension with Aviva? Monitor it online at the touch of a button with MyAviva.

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