Tackling Increased Living Costs (UK)

Hello Mr Postman.

Plonk, what's that? The sound of another utility bill rising.

Life is getting expensive. Energy up, petrol up, and tax rises coming. Stop stealing my money you gits!

We are all struggling with the increased living costs. Things will be tough in 2022. 

It's a perfect storm. It should never have come to this, but it has.

It's a worrying time. Particularly for those with young families and vulnerable relatives etc.

I'll struggle through, I always have. I feel for those who have it tougher. People choosing heating over eating. 

Here's my take on it, for what it's worth. I'm going full "Martin Lewis" today.

Income Tax Rises

I don't mean to scare, but people are not prepared for an income drop. 

April marks a new tax year. Traditionally we see favourable tax-code changes, and feel theoretically richer. Not this year.

In the UK, there's an April national insurance rise of 1.25 percent. Households will lose around £500 a year (on average). Ouch! 

Households will lose around £500 a year (on average). Ouch! 

It's difficult to mitigate against, because the money comes out at source. Tax rises disproportionally impact low income households, they feel the pinch.

There's are a few tricks to reduce tax a small amount. If you work from home (as I do), it is possible to claim £312 back for the year (see here).

If your partner doesn't work, it is possible to transfer a portion of their tax allowance. This is about 10 percent, but not everyone qualifies. Definitely look into this (see here), if you have a "stay-at-home" parent. 

Minimum wage does increase to £9.50 next month, but that's a drop in the ocean, with increased taxes and high inflation.

Council Tax

In April, the government introduces a one-off £150 payment for people in council tax bands A-D. This money is credited back, via a direct debit.

Remember this is a rebate and not a reduction. Council taxes still increase, so the money covers the difference, caused by the price rise.

It's a temporary fix. I don't disagree in principal, all help is good help.

There's no rebates for me. My new council banding is too high, but that ok. There's people who need it more.

I might add, my home is only larger, because I needed the space to "work from home". I suspect many people stitched themselves like this?

I'm happy to pay council tax to a point. It funds important services and the community you live in. 

If you live alone, remember to claim your 25% council tax discount. Stretch the payments over 12 months, if you struggle to pay the larger instalments.

Energy Costs

Where do I start with energy costs?

Gas and electricity prices will soar in April, due to a price cap increase.

Estimates say the annual bill will increase from £1,277 to £1,971 for average households (source). 

This is a shocking increase, that will cripple a lot of people. The government have not done enough and many will struggle. 

We can take the obvious steps. Turn off unused radiators, turn down the thermostat and wear a jumper.

There are limits and we all need to heat our homes. I am very concerned by this and what it will mean for people this year.

I wish I could offer inspiration, but it has everybody stumped. Perhaps look at fixing, if your supplier offers this? 

Petrol Prices

The price at the pump has gone crazy. Filling your car is expensive.

We briefly contemplated a second car, but can't justify it. The cost of fuel is crazy. 

My advice? Drive the most fuel efficient car you can. Eradicate any unnecessary car journeys.

We should all reduce our fossil fuel dependence, but it isn't that easy. Families still need to get from A - to B. School-runs and work commutes are not optional. 

Cars are often a status symbol, but it doesn't make sense to drive a "gas guzzler" right now.

I'm trying to walk more, cycle more and use the car less.  

Final Thoughts

When difficult times arrive, I say "be prepared, don't be scared!".

There's often a small saving to be made somewhere, look at your spending and what you can reduce.

Don't be afraid to reach out for help, from friends, families and even a charity.

The world is tough, there's no shame, no judgement.