Families Struggle with Rising Costs

families struggle with rising costs

by Caleb James on 27 Mar, 2012

As household expenditure continues to rise in the UK, more and more families are finding it difficult to keep pace with the increases. Right now, UK prices are escalating at a rate faster than the world’s other biggest economies. According to information produced by one of the country’s leading debt solutions providers, Baines & Ernst, food prices are rising at 6.3% compared to a 2.1% average for the G7 nations, 0.8% in the Netherlands and only 0.1% in France.

Apart from food prices, families are faced with the rising costs of petrol and transport, fuel bills and other household expenditure. The average UK family spends £473.60 a week on essential outgoings. These include: £53.20 on food shopping, £60.40 on housing, fuel and power, and a whopping £64.90 on transport.

Unfortunately, UK consumers can be certain of one thing – the cost of living will get even higher. With ever increasing oil rates pushing up the prices at the pumps, transportation companies are forced to increase their rates which has a catastrophic knock-on effect – especially when it comes to food costs as retails cover increases by ‘marking up’ produce.

While prices continue to rise, the rate of growth in UK disposable incomes dropped dramatically whilst the recession was at its worst. So as household bills grow, more and more people are finding that their once disposable income is now allocated towards paying for essential bills.

The Baines & Ernst recession and UK families infographic also shows dramatic increases in the number of people unemployed – which is the highest it’s been since 1994. The unemployment rate currently stands at 8.4% of the economically active population.
If families want to save money on everyday essentials, they should do a full review of their finances, discover what their biggest outgoings are and find out if they could cut spending in these areas.

For example, simple things such as changing energy providers, shopping around for insurance providers, setting budgets and creating meal plans can all help families reduce spending.

What’s more, families could take advantage of supermarket deals, special offers on eating out and petrol saving coupons. Some high street food stores offer loyalty points which can be redeemed in restaurants and entertainment venues – making it easier for people to still enjoy family time without spending lots of money.

If you find yourself in a difficult position with debt and need help getting your finances back on track, specialist debt companies such as Baines and Ernst could help you consolidate debt repayments into an affordable monthly fee with a tailored solution like a Debt Management Plan.

They also help people clear debts through Debt Relief Orders and provide an IVA Advisory Service to help people out of tough financial situations.

About the Author

Caleb James

Caleb James is a financial advisor and journalist, who contributes regularly to financial blogs and industry publications.