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Tips to save during the UK cost of living crisis

The state of the economy in the UK at the moment has plunged us into a full-blown cost of living crisis. The cost of essentials such as energy, petrol and diesel have skyrocketed in recent months and rising inflation has hit a 40-year high. It is understandable to want to cut back where possible to avoid financial stress.

Cost of living increase 2022

The Office for National Statistics has reported that a staggering 89% of UK adults have seen an increase in their cost of living during July 2022*. This is a significant amount of people affected nation-wide and we want to help wherever we can.

We are going to highlight our top tips for how you can actually save money while living in the UK during this cost of living crisis. Yes, you heard us right. Even during this financial crash, there are still ways in which you can cut costs and hopefully reduce some of your financial worries.

Cost of living help

1. Budget and track your spending

The first place we would suggest starting would be by looking at what you are already spending. You don’t need to make an immediate change. Simply spend as normal for a week and then look back at your purchases.

Consider things such as:

–      Was this purchase 100% necessary?

–      Could you have bought the same item for less elsewhere?

–      Was there a budget version of the same product available e.g. supermarket own brands?

Questions such as these may seem like you’re looking at small details, but they could actually help to save money long term. A basic change can make a big difference to your finances. Cutting out buying that morning coffee on the way to work can save a few pounds short term, ultimately leading to a significant saving over time.

There are also other fun and easy ways to save money, such as taking part in some of the saving challenges sweeping the internet currently. There are lots of suggestions online for quick and simple ways to save. Here are our 3 favourites:

–      The £1 saving challenge: This plan will allow you to save £365 a year easily by making sure you put aside just £1 per day. A straightforward plan but definitely an effective one.

–      The 1p saving challenge: You start by putting aside 1p and then increasing your saving amount by a further 1p as each day goes by e.g. day 2 is 2p, day 3 is 3p. These tiny amounts can build to something big with you having saved £667.95 after a year.

–      No spend challenge: This one can be tricky but rewarding if you put your mind to it. With this challenge, you only spend on basics like food and mortgage payments. You cut out all additional purchases for a set period of time. You may find doing this for even a week can lead to savings.

If you are finding it difficult to keep track of your budget, there are also apps out there that can do the hard work for you. Check the app store for a whole host of options that will be able to help you manage your finances effortlessly and efficiently.

2. Have a clear out and sell unneeded items

We all have those items sat in the back of drawers and wardrobes that we haven’t been able to part with – but realistically will never use again.

These could be electronics that have been swapped out for newer models or clothes bought on impulse that are never to be worn again. If these items are still in decent condition, it is worth considering you may be able to get back a portion of what you spent on them by selling them on.

There are so many websites out there that specialise in selling second-hand goods with eBay, Depop and Vinted being just a handful of examples. You will need to check the terms and conditions of the website you choose for things such as sellers fees but usually you will be able make a decent profit.

This money can then be used for whatever you choose whether that’s going towards the household bills, new school uniforms or even a little treat after cutbacks elsewhere.

3. Watch out for scams

It is sad to say that during hard times, there will be people out there looking to take advantage of the situation. This is true at the moment, with the amount scams claiming to help you save money having risen massively.

It is best to remember if it looks too good to be true, it probably is. Keep your eyes peeled for emails, social media posts and texts advertising things such as product giveaways, new jobs and investment deals. The majority of the time these will not be run by valid, reliable sources and unfortunately will lead to you losing out.

There will also be people who will pretend to be well known businesses needing personal information from you. Never give any information out without making sure first that you are actually speaking to the business they claim to be. If in any doubt, ask for proof. A legitimate business will be more than happy to give you information to prove they are who they say they are.

Scammers will try and use any details you give them for fraudulent purposes so be very careful about what you share. It is best to be cautious with any deal or offer that is advertised through a non-verified account or business.

4. Look into government support schemes

With expenses in the UK rising rapidly, the government have taken action where they can. There are now several support schemes and cash payments available for certain specified groups. These include:

–      Council tax rebate: £150 payment for houses in council tax band A-D in England, Scotland and Wales. Northern Irish households will receive an equivalent amount.

–      Household Support Fund: This scheme plans to provide £1billion in additional support to households not eligible for other forms of help. This scheme runs until March 2023.

–      Universal Credit taper rate: The taper rate has been reduced from 66% to 55%, with work allowances increasing to £500 per annum as of late 2021.

–      Cost of living payment for those on benefits: People on various benefits and tax credits could now be eligible for a payment of £650 across 2 lump sums to help with their cost of living. For which benefit recipients are entitled to this check the gov.uk website for further details.

–      Pension credit cost of living payment: Pensioners entitled to a Winter Fuel payment can now also access a top up of a further £300.

–      Disability cost of living payment: Anyone on a form of disability benefit such as Disability Living Allowance will receive a £150 payment. Paid automatically and tax-free directly to households in September.

With some of these schemes, the government will pay out to you automatically if you are in receipt of specific benefits. It is still worth checking though if there are certain pay outs you may be eligible for as this could be a great help towards paying your bills.

5. Don’t shop less, shop smarter

The immediate instinct when trying to save money may be to cut spending back as much as possible in all areas. However, there are certain necessities that you will still need to purchase such as food and drink, clothes and fuel.

There are ways in which you can save in all of these areas by budgeting, researching and planning ahead. The pricing for products can vary so it is a good idea to shop around for the best deal.

Before choosing where to do your weekly food shop, it is worth heading online and checking the prices across supermarkets. With so many to choose from there is bound to be one or two options best suited to your budget. Most stores will even have an own brand range, offering similar products to larger brands at much lower prices.

Some food shops may have deals on such as 3 for 2 on items you need or even price match promises to compete with other brands. It is definitely a good idea to check into any potential deals available ahead of going into store.

With clothing, there are literally hundreds of options to choose from if you are in need of something new. Do a bit of digging before heading out and buying that coat that is £70 in one store, when you can find a similar one for £35 elsewhere. You can also try shopping second hand or vintage for generally lower costs and less environmental impact.

When it comes to fuel, again prices can vary slightly depending on individual petrol stations. If you have a few nearby, keep an eye out for which one currently has the lowest pricing before filling up.

6. Be energy savvy – turn things off or don’t use them at all

The energy price cap rose by 54% in April and is expected to rise again in October. This has led to soaring energy prices and plenty of worried families.

It may seem pretty basic to suggest simply not using electricity as a way of saving money on your energy bills. This isn’t what we are suggesting. It is just worth being sensible about what appliances and electronics you use and when.

For example, in the summer it may be sensible to air dry clothes where possible as using a tumble dryer will cost around 25p for half an hour and 50p for an hour.

Although this doesn’t seem a huge amount, if you are using your tumble dryer consistently this will start to add up. Cutting back how often you use this appliance and others can still help you save on your energy bills.

A great start to saving on your bills is by unplugging electronics and appliances that do not need to be used. Even small measures such as this can help you to save on your bills long term. With energy prices soaring every little step can really help.

Something as simple as leaving your TV on standby, rather than switching off the plug can also be draining your electricity. This can use up to 1.3 watts of electricity on average – without even being switched on.

7. Review your subscriptions

We all have our hobbies and activities we enjoy in our spare time. This can be things such as going to the gym or watching new TV shows and films on our streaming service of choice.

As much fun as these may be, these subscriptions may be expenses you could do without if you are trying to cut back – especially if you aren’t using them consistently.

If you are paying out for a gym membership when you are only going a couple of times a month, it may be worth cancelling your plan. Be aware there can be cancellation fees though, so it is worth double checking the contract for your plan before taking any steps to cancel.

One of the major recurring subscriptions in UK households are streaming services. 9 out of 10 UK residents have used a streaming service within the last 12 months, with 58% of households subscribed to at least one service.**

With the option of having thousands of hours of entertainment accessible in our own homes this makes sense.

But if you are not making the most of your plan it may be worth reviewing it or even cancelling it completely, especially if you have subscriptions to multiple platforms. There can be options of reducing the amount of screens on your plan for example, which can reduce the monthly fee.

Regularly review your additional expenses and decide what is worthwhile and what can be done without. You may find that there are areas in which you can cut back and immediately save on your monthly expenses moving forward.

8. Keep important safeguards in place

The cost of living in the UK has risen dramatically this year. When faced with rising costs, it can be extremely worrying. You may consider removing any additional bills you believe you can live without for the time being.

While this is a sensible first step, make sure not to cut out something that may be important and save you money at a later date. Policies such as home, travel and life insurance are safeguards that you may think you can do without, but we can assure you they will be beneficial long term.

Imagine something was to happen and you were to become stranded on holiday, injure yourself, or in the worst possible scenario pass away. Having removed your cover at an earlier point, whilst saving money short term will now leave your family in a world of financial difficulty.

It is also important to remember if you cancel life insurance policies and then take a new policy out at a later time, you could face significantly higher costs. This could be due to having been diagnosed with medical conditions since taking out your previous policy.

The most common reason for higher cost is the simple fact that you have gotten older. Life cover is generally cheaper the younger you are when securing your policy.

Cutting back for small savings today could end up costing you massively later on.

*according to the UK Parliament briefing from 17th August 2022

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