How to beat the cost of living increase in the UK

Equal Pay Day - 4 pink piggy banks in a line

There’s been a lot of talk about the cost of living increase in the UK recently. As inflation increases and our bills go up, our budgets are being stretched further and further.

Unfortunately, there’s only so much you can avoid these increases. There’s only so far you can reduce your expenses. However, it’s likely you can make some adjustments that will reduce your monthly expenditure.

With that in mind, I’ve compiled some top tips on how you can beat the cost of living increase in the UK. I’ve had some help from some other money bloggers, because the more we share the more we can all benefit.

This post will cover:

  1. How much is the cost of living increasing by?
  2. Why is the cost of living increasing?
  3. Tips to beat the cost of living increases
  4. Other ways to beat the price increases

How much is the cost of living increasing by?

The headline inflation figure is 5.4%. This means on average goods and services cost 5.4% more than they did a year ago – a significant increase.

However, the reality may be far more bleak. Inflation tends to disproportionally impact those on lower incomes. Jack Monroe highlighted this in an excellent Twitter thread, where she stated the price increase on basic household food items.

For example, a year ago the cheapest pasta in her local supermarket was 29p for 500g. Today it’s 70p. That’s a 141% price increase, which will hit the poorest and most vulnerable households.

Baked beans were 22p and are now 32p – a 45% increase year-on-year. Bread was 45p and is now 58p, a 29% increase.

These are all basic, staple items that have increased way above the headline rate of inflation. Therefore, the average cost of living has probably increased by far more than 5.4% year-on-year.

Why is the cost of living increasing?

There are many reasons the cost of living is increasing. I’ll split it into three main factors.

Supply chain crisis

Simply put, Covid-19 has slowed down production of a lot of goods. Staff have been isolating and off sick, meaning the required number of products can’t be made.

There has also been global container congestion – think the Suez Canal! This means a lot of goods and materials have been delayed, which has led to an increase in prices.

In the UK, we have the added issue of Brexit. This has helped contribute to a shortage of HGV drivers, which has put further pressure on the supply chain.

2. Pent up demand

Due to lockdowns and prolonged Covid-19 restrictions, there’s been a huge increase in demand for services now everything is opening up.

This has put pressure on an already stretched hospitality industry, which has in turn driven up prices.

3. Energy crisis

We are also in the midst of an energy crisis. This has been caused by a number of factors, including the pandemic, extreme weather events, and global geo-political tensions.

Tips to beat the cost of living increases

There are a number of things you can do to beat the cost of living increase in the UK.

JoneyTalks focused on lifestyle changes. These can be hard to implement, especially if you’re time poor, but if you can manage it, you may also get some added health benefits.

For example, can you walk or cycle more to avoid using your car and therefore spending money on petrol? Another option is to try and share journeys with friends and family members who are going to the same or similar places as you. Most people will jump at the opportunity as it’ll save them money too.

Mr Thinking Big suggested lowering the temperature of hot water you use for heating. The higher the temperature you heat it at, the less efficient it becomes. 45 degrees Celsius is enough for most installations.

You could also try putting your heating on for shorter bursts – perhaps in the mornings and evenings. If you’re out at work all day, don’t waste money heating an empty house!

Equal Pay Day - 4 pink piggy banks in a line

Other ways to beat the price increases

A Dime Saved acknowledged that it can be hard to move the dial on “big bills”. Instead, she likes to focus on smaller items, like food shopping.

Cutting out meat and replacing it with more beans and other grains can be an easy way to save a significant amount of money.  

Cooking came up a lot when I asked for these tips.

Tony (onemillionjourney) highlighted the importance of planning your meals in advance to help you stick to your budget. This will also allow you to buy in bulk if you can afford it, which will save you money in the long run.

Broke Girl in the City highlighted the importance of being organised and having a clear budget.

She uses money apps to work out her spending and where it goes by category. She also reviews all her bank and credit card statements for recurring subscriptions to reduce costs.

This is a really good way to reduce your expenditure. Are you paying for subscriptions you don’t use? Or could you cut the number of screens you pay for on Netflix, for example? It’s a good idea to go through all your direct debits and make sure you’re not spending unnecessarily.

Don’t forget to follow me on social media @Katie20Percent to keep up to date with all my latest posts.

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If you found this post about beating the cost of living increase in the UK useful, please like it and share it on social media or with your friends. What are your top tips for beating the cost of living increase? Comment them below, I’d love to hear your thoughts.

4 responses to “How to beat the cost of living increase in the UK”

  1. […] the cost of living crisis, there was a lot of speculation about the this Statement. Many were hoping Chancellor Rishi Sunak […]

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  3. Love this! There is some great advice in here.

  4. Cost of living increase.
    Is it 5% or 141%??? That’s the big question. How can you manage to keep your costs down and avoid inflation? I don’t know.
    But we can’t forget that if you cannot control your spending, you’ll be doomed to paying for it.

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