The Rising Cost of Living in the UK

Discover the hard facts about prices rises and how they are leading people into debt

The recent hike in the cost of living has been widely covered by the media but when the facts and figures are studied in more detail it’s plain to see that many households in the UK are heading towards debt problems and financial meltdown.

The average pay rise in the UK this year came out at 3.4% or an extra £533 in each person’s annual wage packet. When you consider that the overall cost of living in this country has soared by 9% or £1783, then it’s obvious that the figures simply don’t add up.

A report by price comparison site Uswitch.com found that the average household will face an increase in their monthly bills of £148, which is considerably more than the £44 a month that the average pay rise will leave you with. The same report estimated that because of this discrepancy in income against costs, UK households will be left facing a deficit of a staggering £21 billion.

These figures are based on the average salary increase, but the Uswitch survey found that 9 million people received no pay rise at all, leaving them to try and find an extra £148 a month from somewhere.

Credit cards are often the first port of call for people when they don’t have the money to pay their bills. This only adds fuel to the fire as the many of the credit card companies have increased their interest rates considerably in the last year with some now charging more than 30% APR. This has the unwanted effect of paying more than the bills themselves in the long run and only adds to the misery and despair that comes with getting into debt.

Breaking down the day-to-day living costs doesn’t really provide any comfort with unleaded petrol going up by 18% in the last year, basic food shopping rising by 11% and gas and electricity dual fuel prices increasing by an average of 13%. Clothing and footwear prices actually decreased since 2007 but not enough to have any significant impact on the overall financial outlook.

So what can you do to make your life easier? Regularly reviewing your finances is essential to keep track of your outgoings and can help you highlight where you can make savings. Shopping at a different supermarket for example could save you as much as a hundred pounds a month or converting your car to run on LPG rather than petrol or diesel will cut your fuel costs considerably.

If you find yourself getting into debt and struggling to make ends meet financially then you need to act quickly before your finances get out of control. Debt solutions such as debt management and consolidation may be a viable option for you, but it’s important to get professional debt advice before making a decision you could live to regret.

Call Debt1 now on 0800 043 4747 to speak to one of our expert debt advisors and deal with your debt problems head on before they take control of your life.