The Consumer Council News Letter Column

Cost Of Living - Assessing The Situation

Saturday 1 November 2008

Helping consumers cope with the rising cost of living is the Consumer Council’s top priority. Here’s our assessment of the current situation, how consumers can help themselves and what others must do to help.

·       An average family of four has to find an extra £36 per week just for “must-haves” of food, mortgage, heat and petrol[1]. 

·       Two-thirds are struggling to pay bills; almost one third believe they are only one pay packet from hardship should something unexpected happen[2].

·       People are planning to cut back on heat and food; many are breaking into savings, not saving at all and cancelling insurance[3].

·       Many people are struggling to keep up with their mortgage repayments and notices for housing repossessions are up 59 per cent between April and June 2008 compared to the same period last year[4].

·       On average this year, electricity is up by £200 and Phoenix gas is up by £263.  In 2006, around one in three homes were in fuel poverty. It’s unclear how many more are in fuel poverty as a result of these price increases; our estimate is as much as 45%.

·       The cost of 900 litres of home heating oil has fallen by 32 per cent since its peak in July[5]. However, it’s still 21% more expensive since this time last year[6]and unaffordable for many. 

People will struggle to make ends meet this winter; some will be hit harder than others. However, there are things they can do to help themselves:

·       Claim every penny you’re entitled to and every benefit available to you.  You should also make sure you claim every penny with your name on it.  There’s about £12 million in lost or forgotten bank accounts.  Visit www.mylostaccount.org for more information. There’s also £11 million in unopened Child Trust Funds.  Visit www.childtrustfund.gov.uk.

·       Budget – Look at what money you’ve got coming in and going out and see where you can cut back.  Food’s a good start - we throw out about £420 worth every year[7].  Download our budget planner at www.consumercouncil.org.uk

·       Insulate – Look at ways to make your home more energy efficient and make sure your insulation and heating are working efficiently.  Contact 0800 512 012 or www.energysavingtrust.org.uk.

·       Shop around - for petrol, food, heating oil and insurance; make sure you’re getting the best deal.

Consumers are facing tough times. Our analysis poses an immediate challenge to people to take whatever steps they can to help themselves and to Government and business to ensure that everything that can be done to help is being done.