This significant contribution for UK families is found by adding together money UK households save through online shopping prices, internet banking, price comparison websites, and working from home online.
UK Executive Director Daniel Dyball said: “The internet creates real, meaningful value for families. The savings enabled by the internet mean households have cash to spend on other things and find it a little easier to deal with other pressures on their budgets. This research demonstrates the tangible benefits technology brings to everyday life and to the economy.”
The figures are revealed in exclusive new analysis prepared by Internet Association:
- UK consumers saved nearly £700 million by shopping online in 2018, freeing up cash to be spent on other goods and services and creating jobs.
This is based on research published in the respected American Economic Review which found that, on average, the price of identical goods online is 1% lower than goods in a physical store – and with online retail accounting for 18 percent of the GB retail sector (excluding automotive fuel), people in Great Britain saved over £690 million by making online purchases in 2018.
- The internet lowers pressure on household budgets by reducing some of the strain caused by large recent increases in energy costs: UK households saved over £475 million using price comparison websites to switch energy supplier in 2017.
Using recent research by the UK’s Competition and Markets Authority, the average annual saving made by a dual fuel customer switching supplier in 2017 was over £200. With 4 million such switches in 2017 – of which over 2 million were made using a price comparison website – UK households saved over £470m using price comparison websites to switch energy supplier in 2017.
- The third big source of savings is internet-enabled working from home – which saves around £10 billion a year.
Official figures from the Office for National Statistics show that 76 percent of employed adults used a computer to work in 2018. Of these, 14 per cent work from home every day and 18 per cent work from home at least one day a week. Adjusting for holidays and average sickness rates, UK workers used internet technology such as email, video-conferencing and “Cloud” services to work nearly 700 million days from home in 2018.
Averaging-out the price of fuel, plus public transport fares, gives a total of just over £2 billion being saved annually by those who work wholly or just occasionally from home. The value of the time saved by not commuting adds more still – just under £8 billion.
- The internet saves families money by making banking and food shopping less time consuming – a time saving worth more than £10 billion a year.
A 2018 survey by a leading European retailer revealed the average UK adult estimates that internet banking saves them around 21 minutes each week, while online food shopping saves a further 23 minutes a week. This adds up to more than 2 billion hours a year. The value of this time saving is more than £10 billion a year.
“The wins for consumers are set to grow as technology develops, but that requires the Government to make sure the UK has the right policies to allow the internet to thrive,” Dyball concludes.
Other items that used to form part of typical household expenditure are now free to users, or vastly cheaper, thanks to the internet. That includes holiday guidebooks – now often replaced by services like Tripadvisor or Yelp – and VHS or DVD players, now replaced by better-value, higher-quality streaming services such as Amazon Prime or the BBC’s iPlayer service delivered over the internet.
Meanwhile internet businesses have continued to deliver better value forms of technology; for example streaming music through Spotify or Google Play on mobile phones and other music players rather than downloading individual MP3 tracks to expensive players.