UK households are spending more now than before the financial crisis of 2007-8, according to the Office for National Statistics. The average household spent £554.20 each week between April 2016 and March 2017 - after adjusting for inflation.
The ONS says this represents a real-terms rise of £21.20 per week, compared to the previous financial year.
The category on which households spent the most was transport. The average spend on personal and public transportation was £79.70 a week, translating to an increase of £5.40 on the previous year.
Those aged 65-74 spend nearly a fifth of their outgoings on culture and recreation in the same period.
Childless households spent more on transport than those with children.
The substantial increase in inflation has been highlighted by the ONS. Between April 2016 and March 2017 inflation rose from 0.7 per cent to 2.3 per cent. The ONS suggested this increase has encouraged families to bring forward certain 'big ticket' items - and could be a key reason why overall spending has risen so much in the past financial year.
Most spending categories saw an increase - including food, non-alcoholic drinks, restaurants and communication.
Transport spending was up due to the purchase of new cars, an increase in vehicle running costs and more costly transport services - particularly air travel.
Recreation and culture saw a significant increase in spending, becoming the second biggest category for the first time since records began.
English households spent £10 more per week than the UK average - which stood at £554.20.
But spending varied widely in different parts of England. The North East spent £437 per week, while London households spent more than £600.
Katherine Chapman, director of the Living Wage Foundation, said, “Families are having to devote more and more of their finances to necessary costs like transport and household bills. The result is that millions of people are struggling to make ends meet, with some workers resorting to visit food banks or even skip meals.”
Ms Chapman said the squeeze on household finances could be alleviated by paying "wages that genuinely cover the cost of living... we need to see more companies step up and pay a real living wage.”