Its getting more expensive to live in the UK

The cost of living in the UK increased substantially in the last decade, up 16% on average with house prices, petrol and tobacco the main contributors, according to new research by Barclays Life Insurance. However over the same period, life insurance has been one of the few products to fall substantially in price, with average premiums down 51.7% (source: Moneyfacts Life Investments and Pensions). The average market premium figure assumes an individual aged 35 next birthday with £50,000 worth of cover for 25 years.

Meanwhile, according to the official Consumer Prices Index (CPI) from the Office for National Statistics, the cost of living in the UK has increased by 16% in the last ten years as the economy has benefited from a sustained period of low inflation. But this only tells part of the story. When the individual CPI sectors are compared it is clear that certain sectors have seen much more substantial increases than others.

Worth pointing out is that items such as tobacco and utilities have increased in price by more than overall CPI inflation as higher tax and international energy prices have pushed costs up. Perhaps the main surprise though has been the almost 50% increase in the price of a packaged holiday, particularly as competition from the internet has risen.

At the other end of the scale, clothing and footwear, cars, major household appliances and life insurance are amongst the very few sectors to have seen a reduction in price over the last ten years. These changes have been for various reasons: clothing prices have benefited from being manufactured in low cost economies, cars have reduced in price in part due to regulatory and media pressure and life insurance has reduced as life expectancy has risen.

When you take prices rises down to individual products the differences are even more revealing. House prices aren't covered in the CPI but on average have gone up 189.5% in the last 10 years. Petrol and cigarettes have gone up by over 70% and even the cost of the humble loaf has risen by over 50%.

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