Millions of households across the country are facing a significant squeeze of their budgets this year due to spiralling costs of living, coupled with slower wage growth.
The Office for National Statistics (ONS) found 66% of people have reported their cost of living has increased in the past month, with energy prices being a growing expense.
Nearly 30 energy suppliers have gone bust in the last year after being caught in the squeeze between the price cap and rising gas prices and earlier this week, analysts at consultancy Cornwall Insight said they think the price cap might hit £2,900 for the average household in October.
They said £400 has been added to their predictions for October's cap since Wednesday last week, when Russian President Vladimir Putin launched an unprovoked attack on Ukraine.
Cornwall senior consultant Dr Craig Lowrey said: "Following the catastrophic events in the Ukraine and the subsequent supply concerns across Europe, wholesale prices have been extremely volatile.
"On Friday we saw our energy price predictions fall by over £200, only for them to rocket to the record levels we see today.
"With the response of countries and companies to the actions of Russia changing almost hourly, there is no doubt these peaks and troughs are set to continue at least in the short term.”
He added: "The UK Government will need to be ready with ways to mitigate the impact on consumers, with an increase in financial support to households likely to be a necessity, in addition to renewed considerations on support to business customers."
To help households make their money go further during the financial crisis, Thomas Allder, Customer Director at Vanquis, shares his top tips on how to make your money go further.
1. Grabbing deals on groceries
Food and toiletries can be some of the most expensive regular costs for households. It’s usually worthwhile shopping around for the best deals on items such as tinned or frozen food. You can also join local community groups, such as on Facebook, where members share the best local bargains, especially if you follow a certain type of diet, such as gluten-free.
Also make sure you sign up to any free store loyalty schemes such as Tesco Clubcard or Nectar, you can often get deals and the points you collect could be put towards purchases.
2. Beating the bill hikes
When it’s time to renew bills, such as car or home insurance, premium TV channels, mobile phone or broadband, it’s worth shopping around for the latest deals.
Use a comparison website to see what is best for your situation, before considering your current provider’s quote.
It’s worth noting no comparison sites are offering energy deals right now and unlikely to ahead of the price cap coming into effect on April 1. Consumer champion, Martin Lewis advisies only switching to a new tariff if, and it’s a very strong if, the offer is 25% above what the April price cap will be for your household as this could protect you from the predicted eye-watering rise in October - read more about this here.
3. Fantastic finds online
A fifth of Vanquis customers’ surveyed (22%) said they want to spend less on material items this year. One way to do this is join local freecycling groups on sites like Facebook. You can join these groups to look out for items such as second-hand furniture, toys, garden equipment and more.
At the same time, you can consider giving away items you no longer need, or selling them on websites like Gumtree or Facebook Marketplace for a bit of extra cash.
4. Finding free childcare benefits
If you have young children, make sure you have applied for the free childcare you are entitled to - you may be eligible for tax-free childcare if you are in work.
If your child is between 3-4 years old, you can get 15 hours free childcare per week if you’re a working parent. Those on benefits such as Universal Credit may also be eligible for 15 hours free childcare. The free hours can be used at any Ofsted registered nursery or childminder - find out more on the GOV.UK website here.
5. Sizing up subscriptions
Most people have lots of subscriptions, whether it’s Prime Video or Netflix. Make sure to check your bank statement to ensure you are not paying for something you no longer use.
You may have downloaded a free trial, so be sure to cancel it if you are no longer using it.
To keep up to date with the cost of living crisis, join our Money Saving Scotland Facebook group here, follow Record Money on Twitter here, or subscribe to our twice weekly newsletter here.
