The Rising Cost of Household Bills
20th July 2017
If you've noticed that your household bills seem to be jacking up faster than your wages lately, then you're not alone. All over the UK, families are getting squeezed as their essential costs rise faster than their income can keep up with.
Why bills are rising
It comes down to inflation, meaning the pound in your pocket buys you a little less each year.
Some of the time, it's a slow creep that you barely even notice. Every so often, though, you reach the point where the price rises start to get painful. That's what working people are starting to feel now, and they're understandably not happy about it.
Economists are calling this the tightest financial pinch since 2011 – and if you know your recent history, that's no small statement. Between 2001 and 2011, the average household's bills rose by over 70%. Electricity bills literally doubled in that time, and gas prices tripled!
At the same time, inflation rose by 38%, with wages lagging badly behind. Those weren't exactly fun times for most families, with about 90% of us having to cut back on our spending just to make ends meet.
How much worse off will I be?
We're not hitting the panic button just yet.
However, people's disposable income is starting to feel the squeeze again. Last year, UK households wound up with about 2% less spare cash than the year before.
Wages did still go up by 1.7%, but prices rose by more. Property income came down, as did benefits – none of which helped.
So far, though, the damage has been fairly limited. In fact, some shop prices have actually been dropping a little in the last few years.
Overall, inflation's sitting at around 2.9%, according to the Bank of England, but prices are affected by that in different ways. Food prices, for instance, went up by 1.4% in the last year, while non-food prices actually went down by the same amount. As always, it's the lowest-income households that get hit the hardest, though. This is particularly true if they're relying on benefits, many of which have been frozen.
Making sure nothing's missing from your pay
What it all comes down to is that you've got to make the most of your money.
Of course, that's tricky to do if the taxman's got his hand too deep in your pocket. It's times like these that make what we do at RIFT all the more critical.
As your travel and food costs at work rise, for instance, so does the money you're owed by HMRC. As we always point out, we're talking about your cash here, and the government actually wants to give it back.
For some households, a tax refund might mean a nice little family holiday. For others, though, it could be a vital lifeline. Either way, you've got to reach out and grab it to get the benefit. An average tax refund takes about 6-8 weeks to come through, depending on how many claims HMRC is dealing with at any time.
Talk to RIFT about claiming back what the taxman owes you, whether you're PAYE CIS or Self Employed. We count every penny because, when it comes to tax refunds, every penny counts.