The cost of living is skyrocketing. Households have faced their toughest time in decades with the cost of living continuing to rise.
The Office for National Statistics says inflation is running at 7%. The Retail Prices Index – an alternative measure of inflation that includes certain housing costs, including council tax – rose even more hitting 9% per year in March, its highest level since 1991.
Prices in the shops are noticeably increasing and analysts say the full extent of rising costs is not yet being passed on to customers by supermarkets.
At Continuum we are looking at the reasons and what you can do to protect yourself and your standards of living.
What is causing this inflation?
The spiralling cost of living may be the price we pay for economic recovery. As the world gets back to work, there are supply chain shortages as production restarts and orders come in. The cost of anything in short supply tends to increase and the price is ultimately paid by consumers. A hike in the price of petrol, energy, food and clothing will have a knock-on effect to businesses who need them. Higher costs mean demands for higher wages, creating an inflationary spiral. It may be made worse by a shortage of key agricultural workers and of lorry and delivery drivers.
What is the government doing?
The government is worried about inflation, which can mean serious problems for the UK economy if unchecked. They have tasked the Bank of England to deal with it and the usual solution for dealing with spiralling inflation is to increase interest rates. This is already in progress, but the bank will be unwilling to act too dramatically for fear of choking off the recovery altogether.
Any increase in interest rates will make the worries of people on a tight household budget even worse. If they have a variable rate mortgage or tracker, it will add increased monthly home loan repayments to the difficulties caused by higher prices in the shops.
What can you do about it?
Inflation may be unavoidable, but the real problem is what to do about its effects on your own finances.
One solution is simply to tighten your belt.
But there is a limit to the savings you can really make when it starts to become difficult to make ends meet.
That’s where professional help can be valuable.
At Continuum we can help you find ways to reduce your major costs. Your mortgage for example – the chances are that we may be able to help cut your outgoings through remortgaging. You will not want to cut corners on your life insurance, or the protection it provides for your loved ones – but we may be able to find providers offering the cover you need with a lower premium.
We can also find ways to make your savings and investments work harder, increasing your income now, or in the future.
To find out exactly how our expertise can help you make the most of your money, simply call us now. We have the solutions you need.
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable savings strategy, you should seek independent financial advice before embarking on any course of action.
Your home may be repossessed if you do not keep up repayments on your mortgage.