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The cost of living has reached a tipping point for many families across the United Kingdom. From the cost of energy bills to the food we are purchasing from our local shop, we are seeing increases in the cost for an average family rise to levels we have not yet seen before. When April 1st arrives, we will also see national insurance increase by 1.25% on all earnings above £9,568. Let’s take a look into what all this means for the average family in the United Kingdom.
The price cap for energy bills is set to increase by a staggering 54%, which to the average family will be a change of £693, from £1,277 to £1,971. This enormous increase is set to affect 22 million residents of the United Kingdom. In a report by The Mirror, a single mother was discussing how she had to choose between heating her house and feeding her family. Unfortunately, we will see similar stories throughout the year, especially for low-income families. The personal tax allowance has not increased alongside the rising cost of living. The tax allowance currently stands at £12,570, which means that families are having to pay an additional £165 per year as the tax band does not increase with inflation.
Over 77% of households in the United Kingdom own a car, which means a massive percentage of us will have to fork out more to keep our vehicles moving. We have just seen reports that the petrol prices have broken records by exceeding 150p per litre. This price is expected to keep increasing to 160p per litre, which will further impact the cost of living. With this 26.8% increase in the cost of running your car, more people across the United Kingdom should see a £311 a year increase in their annual costs.
This is only a handful of areas that are going to be affected by the cost of living crisis. We will also see rail fares increase by 3.8% in March, which equals a £67 per year increase. The annual inflation for food costs is 4.2%, which will see the average family spending an extra £165 per year. Clothing and footwear will also increase by 4.2%, which causes a £51 per year increase.
There is no doubt that the cost of living crisis is of great concern for those living in the United Kingdom, and across the world. Unless our government takes great caution with the future of the lives of ourselves and our loved ones, we will see a dramatic increase in families living in poverty.
Saffron Invoice Finance is part of FCA regulated Saffron Asset Finance.
It specialises in offering securitised working cash injections to viable SMEs businesses. Invoice Finance enables you to release the cash tied up in outstanding customer invoices, so you don’t have to wait weeks or months for payment.