Cost Of Living Set To Get Much Worse In Coming Months

16th May 2022

The news articles streaming out in the last few days point to a worsening crisis for cost of living.

Energy Costs
Even after the April increases to electricity and gas prices even higher prices have been in train since the price cap is to be revised again in October with estimates an average bill to reach.
Ofgem is proposing to change the CAP every 3 months instead of 6 months from October.
Energy bills shake-up plans to smooth price rises
What is the energy cap and why are energy bills so high?
[url=https://www.bbc.co.uk/news/business-58090533[What is the energy cap and why are energy bills so high?[/url]
Energy cost make up a large part of household bills so consider switching things off at night, showers instead of baths, turning thermostats down a degree.

Food Prices
Food prices have already risen and predicted to rise even further.
The Ukraine war with sanctions against Russia have made food such as wheat, corn, sun flower oil and other staples get scarce on world markets.
Now India also a big wheat producer has announced ban on exports of wheat to alleviate rising prices at home.
Ukraine war: Global wheat prices jump after India export ban
Ukraine war Global wheat prices jump after India export ban
The full extent of price rises in food are still to hit the shelves

Fuel Prices
Diesel price is now over average 180p per litre but over £2 in some places.
RAC pump prices

Motoring Costs
Apart from fuel prices the costs of driving a car are rising. Second hand car prices have shot up and are still increasing partly due to the lack of new cars available due to computer chip shortages.
Car parking charges are going up and being introduced where they did not exist before.
Tyres with the biggest price increase went up by 45% between May 2021 and January 2022.

What Can You do?
Drive less if you can. Walk or cycle where possible.

Reduce spending using credit cards, store cards or other.
Clear cards completely each month.

Pay off outstanding debts if you can even partly to reduce monthly interest charges.

If possible begin saving for things that are needed and for breakdowns to cookers, washing machines etc.

Do you need to pay for streaming services like Netflix, Disney etc. Many people have already stopped them Check if you are paying subscriptions you have forgotten about and get them stopped if you do not need them. There are many free online tv and film programmes such as iplayer etc

Set a budget each month even if you have never done this in the past. Even people on what was a reasonable income may find the cost of living will overtake their usual spending habits so prepare for it by saving even a little to build a cushion and not have to borrow.

Pay less taxes by cutting down on smoking and drinking as the tax on these are very high.

If you are on benefits then check you have not forgotten to claim everything you are entitled to. If in doubt get advice from CAB, council or other services.

Finally
Inflation is getting worse and the Bank of England has already said it may go above 10%. This will show up in even higher prices in shops and for other services. Salaries, wages and pensions are not keeping up so planning your monthly budget is more essential.