How to survive the big squeeze: Our top money saving tips 1 We are heading for a cost of living crisis. Energy bills are rising, food prices are set to soar and tax hikes will soon start to bite.
The pandemic threw many of our finances up in the air. Many were forced onto furlough and saw their incomes shrink overnight; others saved a fortune as commuting and socialising became impossible in lockdown.
But now we are emerging from the virus crisis, many are seeing their expenses rise as they return to the office. Rolls-Royce’s nuclear plan to mine on Moon 14
At the same time, inflation is rising. The Bank of England has warned it could hit 4 per cent by the end of the year, while supermarkets have said food prices could increase by 5 per cent.
Analysis of price rises in the last year shows the cost of a second-hand car has risen more than £1,600, a tank of fuel is up more than £10 and the price of a pint of beer is creeping close to £4
A Money Mail poll today also reveals that one in two households have started making cutbacks due to concerns over the rising cost of living.
Our survey, carried out by Consumer Intelligence, found many had started to scale back spending within the last one to three months — with most fearing rising food and energy prices.
And exclusive research for the Daily Mail by the Centre for Economics and Business Research (CEBR) also yesterday revealed how inflation will cost the typical family of four an extra £1,800 by the end of this year.
Meanwhile, a retired couple can expect to see living costs rise by more than £1,100, and a lower income couple could be stung by nearly £900.
Analysis of price rises in the last year alone shows the cost of a second-hand car has risen more than £1,600, a tank of fuel is up more than £10, the price of a pint of beer is creeping close to £4 and a bottle of prosecco has risen 55p to £8.
It comes as the new month of October marked the end of the furlough salary support scheme as well as the withdrawal of an extra £20-a-week for struggling households receiving Universal Credit.
The energy price cap has now also increased, pushing up bills for more than 15 million households by an average of close to £140 a year.
And the soaring cost of wholesale gas has seen many suppliers go bust – forcing millions of customers on cheap deals onto more expensive tariffs linked to the price cap.
So, we will help you beat the cost of living crunch. Here, the country’s top personal finance experts share their tips for managing your money and making crucial savings.
Back to basics
After the pandemic disrupted our spending and saving habits, now is a good time to draw up a fresh household budget.
Our survey found that of those households cutting back, more than half were saving by not spending on luxuries such as eating and drinking out.
Three out of four said their cutbacks should be enough to keep them from struggling with money.
Laura Suter, head of personal finance at investment broker AJ Bell, says: ‘If you’re facing a fall in income or rising bills — or a toxic double whammy — then you need to get a grip on your finances and look at what you can afford.‘It’s not a particularly pleasant job but it’s essential to avoid getting into financial strife further down the line. You need to look at what you have coming in, after tax, then list everything you’re spending in an average month.‘Once you’ve listed it all, it will be clear whether you can afford your lifestyle or if you need to make cutbacks.’Sarah Coles, personal finance analyst at investment service Hargreaves Lansdown, adds: ‘The huge benefit of having everything written down like this is you can see where you’re spending money and not getting an enormous amount out of it, which will help you identify the best ways to cut costs.’She says you will need to identify the bills you are overpaying for. And while there aren’t many cheap energy deals at the moment, you can still save on everything from car insurance to mobile contracts and broadband packages.The money expert also suggests cancelling direct debits you don’t get enough out of — gym membership or subscriptions, for instance. And finally, avoid impulse purchases by waiting an hour or even a day before you buy something. My […]
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