Long story short, you’re not imagining it, the cost of living is higher than ever before, and it’s about to get more expensive.
The Joseph Rowntree Foundation found that parents with two children require £40,000 in order to fund a reasonable lifestyle, an increase of £13,900 since 2008.
An individual needs to earn £18,400, an increase from £13,400 a decade ago.
Transport
Public transport has become much more expensive and cuts to bus services means transport costs take up nearly 20% of minimum household budgets.
Bus travel on it’s own is 65 per cent more expensive now than it was in 2008. This means for individuals, the minimum transport cost has risen from £17 to £37 a week.
Food
Between 2008 and 2018, the average cost of food has risen by just over 25%. The minimum food budget for an individual rose from £29 to £44 a week (just over 50 per cent). All the while, energy bills are just over 40% higher than 10 years ago.
Childcare
Childcare costs climbed considerably in the last decade. For a full time nursery place for a 2 year old, parents can expect to pay 50 per cent more than 10 years ago, around £229 a week.
Working-age vs pension age costs
The living-cost gap between older people and working people has completely closed, as pensioners spend more on smartphones, computers and clothing.
Couples who are of pension age, typically spend more now than their working-age counterparts on alcohol, culture and socialising. They also spend nearly as much as them on clothing and food.
The JRF report says that despite shopping around to get the best deals, the rising costs make it harder to make to ends meet, particularly for those living below the poverty line.
Costs may rise even more
Research by the University of Sussex predicts that post-Brexit meat prices could rise by 5.8%, oils and fats by 7.8% and vegetables by 4% on average depending the governments secures a trade deal with the EU.
In 2018, large swings in weather conditions resulted in crop yields falling significantly and consumers facing higher prices for food.
According to the Centre for Economics and Business Research, it’s now predicted that further adverse weather may cause food prices to rise by 5%, adding an extra £7.15 to your monthly shopping.
In terms of travel, expect UK rail fares to increase by 3.1% in 2019, which is line with inflation, and less than the 3.4% increase in 2018, but still an extra dent in your wallet.
International air travel faces similar price rises at 3%. Watch out if travelling to Western Europe as you may experience the highest rise in airfares.
Unfortunately, families will see no increase in child benefit or child tax credits for 2019 which the government has frozen as part of their austerity measures. Parents who wish to return to work see little relief either, as child care costs continue to rise above wage growth (which has only risen by 17% since 2008, childcare costs rose by 52%).
So what to do now?
In summary, UK living costs will indeed rise in 2019, some areas more than others after the rise in inflation.
Luckily we’ve assembled a plethora of strategies you can use counter the ever rising cost of living in the UK, including new ways to reduce travel expenses, save money on food, childcare and clothing. Stay tuned for updates or subscribe to the Rainy Day blog as we’ll be sharing these tips on a regular basis.
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