Beating the Cost of Living Crisis
10th February 2022
The rising cost of living is set to be big news for the near future, with scary statistics like a potential 7% rate of inflation this spring. Energy bills are going up steeply and the food on our supermarket shelves is getting more expensive. These cost increases hit basically everyone, naturally enough, but it’s always the poorest who take the hardest hit. This is particularly true at a time when tax rises are about to start biting, with National Insurance rates going up.
Estimates from the Institute of Fiscal Studies suggest that people on a salary of around £30,000 per year will be losing £1,600 of their pay on average. That figure takes in both the tax hikes and inflation rates, and it’s not a painting a very cheerful picture. Depending on your situation, there could be even more cost rises to watch out for. If you travel for work, for instance, you’re already dealing with almost record prices for your petrol or diesel. Train fares are on the way up as well, with average fares set to end up close to 50% higher than they were back in 2010.
While some of the cost increases might seem relatively small in percentage terms, it’s worth realising that there’s a lot of averaging out going on in some of the figures. Essential purchases like food and clothing might end up with a single-digit percentage increase overall, but that really isn’t the whole story. After all, we’re not all buying the same basket of goods in our weekly shopping. As the food writer Jack Monroe points out, when you look closer at the cheaper end of the supermarket aisles, the real-world price rises are pretty astonishing. Some of the least expensive kinds of pasta, for instance, have gone up in price by 141%. A bag of rice that would have cost you 45p for a kilo could now cost £1 for just 500g. That’s an incredible 344% price hike over last year!
Shocking as this all is, it’s important to notice that not all our everyday costs are heading in the same direction. Depending on where you shop, it’s still possible to find essentials that have held their prices steady – or even dropped them. Just looking at Tesco’s price changes, we can see reduced prices on certain kinds of bread, cereals, vegetables and even cooked meats. The bargains are still out there, and some of them are pretty impressive, but now more than ever it’s important to shop around and seek them out.
When the cost of living’s on the rise, you’ve really got to think about what you’re spending. If you haven’t already seen our articles, “6 Easy Ways to Save on Gas and Electric Bills” and “Save Money with These 7 Simple Heating Bill Hacks”, then now’s a great time to check them out. Most importantly, though, you have to remember that a rise in your everyday costs can also mean a rise in your tax refunds.
From the fuel in your van to the food in your belly, essential work costs are the foundation of your yearly tax refund claims. When those costs go up, the amount to tax you’ve paid on them goes up too. That’s the all-important portion of your everyday expenses that you’re claiming back in your refund, and you’re leaving it sitting wasted in HMRC’s pocket if you don’t claim it back. We’ve said it before, but 2 out of every 3 UK workers never get back what the taxman owes them – and that figure only gets more painful as the cost of living soars.
If you haven’t been claiming the tax refunds you’re entitled to, RIFT can help. Claims can stretch up to 4 years back, so you could be looking at thousands of pounds returned to your pocket overall. Have look at our free Tax Refund Calculator and see if you're owed money back for work and travel expenses you've had to cover.
Many working people don't even realise they have money they need to claim. It’s so important to get the word out about refunds – especially now. That’s why our Refer a Friend scheme pays out cash rewards starting at £50 whenever someone you’ve referred to RIFT claims theirs with us. The cost of living crisis can still be tackled, so make your claim - and make sure your mates aren’t missing out either. Talk to the UK’s top tax refund experts today.