The rising cost of living is affecting households across the UK. Whether you’re filling up your petrol tank or paying at the supermarket checkout, prices have surged for everyday essentials throughout the OECD countries. While inflation may have slowed recently, estimates still put it in the 2-3% range this year—on top of previous increases.
So how can you keep up with these rising costs? We’ve compiled our top 12 tips to help you not just survive but potentially thrive during these challenging economic times.
Boost Your Income
1. Grow your business profitability If you run your own business, now is the perfect time to focus on improving your profit margins. We can help you identify opportunities for growth and efficiency—just ask us about our profit improvement consultations.
2. Consider shared living arrangements Taking in a lodger or flatmate can significantly reduce your housing costs while providing additional income. Remember that the UK’s Rent a Room Scheme allows you to earn up to £7,500 per year tax-free from letting out furnished accommodation in your home.
3. Declutter and sell Those unwanted items gathering dust could be converted into much-needed cash. Platforms like eBay, Facebook Marketplace, and Vinted make it easier than ever to sell your unused possessions.
Reduce Your Outgoings
4. Embrace home cooking Restaurant meals and takeaways can quickly drain your finances. Preparing more meals at home not only saves money but can also be healthier and more satisfying.
5. Create and stick to a budget Understanding exactly where your money goes is crucial. Create a realistic budget that tracks your income and expenses, and most importantly, stick to it.
6. Reconsider your meat consumption Meat is often one of the most expensive items in your shopping basket. Reducing your meat intake or exploring cheaper cuts can substantially lower your food bills.
7. Optimise your transportation With fuel prices remaining high, finding ways to use your car less can lead to significant savings. Consider carpooling, public transport, cycling, or walking where practical.
8. Eliminate high-interest debt Credit cards and buy-now-pay-later schemes often come with substantial interest rates that compound your financial challenges. Consider cancelling these facilities once paid off.
9. Review your regular expenses Take time to assess all your ongoing costs, including utilities, insurance, and subscriptions. Many providers offer better deals to retain customers—don’t be afraid to negotiate or switch to more competitive options.
Invest in Your Future
10. Consider inflation-beating investments Historically, both property and share markets have provided returns that outpace inflation. Speaking to a qualified financial advisor about your investment options could help your money grow despite inflation.
11. Explore additional income streams Starting a side business, launching a new product or service, or developing a “side hustle” can create valuable additional income while potentially developing into something more substantial.
12. Improve your financial literacy Take advantage of free resources online and at your local library to enhance your understanding of personal finance. Better money management skills will help you maximise every pound.
Taking Control of Your Finances
By implementing these strategies—increasing your income by around 4%, finding additional savings where possible, and making smart investments for the future—you can potentially stay ahead of inflation rather than falling behind.
If you’re concerned about your financial situation, remember that you don’t have to face these challenges alone. We have extensive experience guiding clients through various economic cycles, including previous periods of high inflation. Our team is always here to provide practical advice tailored to your specific circumstances.
Support If You’re Worried About Money
Financial stress can take a significant toll on your mental wellbeing. If you’re finding it difficult to cope, these organisations can provide support:
- Mind: 0300 123 3393 – Mental health support and advice
- Samaritans: Helpline: 116 123 – 24/7 confidential emotional support
- Shout: Text ‘SHOUT’ to 85258 – Free, confidential, 24/7 text messaging support service
Frequently Asked Questions
How much has inflation actually increased in the UK recently?
While inflation peaked at over 11% in October 2022, it has since moderated. Current estimates suggest inflation will remain in the 2-3% range this year, though this still represents a significant increase in the cost of living when combined with previous years’ rises.
What government support is available to help with rising costs?
The UK government has implemented various support measures, including the Energy Price Guarantee, Cost of Living Payments, and Council Tax rebates. Visit the GOV.UK Cost of Living Support page to check what you might be eligible for.
Should I prioritise paying off debt or saving during high inflation?
Generally, it’s advisable to prioritise paying off high-interest debt (such as credit cards) before building savings. However, maintaining an emergency fund is also crucial. The Money Helper service offers free, impartial guidance on balancing debt repayment with savings.
How can businesses offset rising operational costs?
Businesses should review pricing strategies, explore supply chain efficiencies, consider energy-saving measures, and potentially renegotiate supplier contracts. Companies House provides resources for businesses facing economic challenges.
Is property still a good investment during inflation?
Property has historically performed well during inflationary periods, but individual circumstances vary. The Royal Institution of Chartered Surveyors offers authoritative guidance on property investment trends in the current economic climate.
What tax reliefs might I be overlooking that could help with costs?
Many individuals and businesses don’t claim all the tax reliefs they’re entitled to. These might include working-from-home allowances, business expense deductions, or R&D tax credits. Visit HMRC’s tax reliefs page for more information.