What price a decent standard of living?

Fuel. Heating. Food. Our biggest day-today living costs are all increasing – yet wages haven’t risen in nearly a decade. Michael Alexander and Jack McKeown ask why life is getting more expensive

Ever find yourself wondering why there’s so much week left at the end of your money? You’re not alone. A report by the Joseph Rowntree Foundation this week found the number of people struggling below an adequate standard of living is on the rise.

Meanwhile, the Office of National Statistics revealed average weekly household spending amounted to £528.90 at the end of last year. Its study showed lower-income households spend a higher proportion of their income on food and energy bills than wealthier families.

The ONS report did contain some rays of hope. Average weekly spending on alcohol, tobacco and narcotics fell below £12 for the first time, and for the first time in five years, British households spent more than £45 a week on restaurants and hotels.

Mostly, though, the picture is one of steadily rising costs. The average price of fuel in the UK now stands at £1.20.07 per litre for unleaded and £1.22.30 for diesel – the highest since 2015.

It’s also getting more expensive to heat and run our homes. This week, Scottish Power was the latest to announce price rises, with its standard gas and electric tariffs going up by an average of 7.8% at the end of March. Npower and EDF Energy are increasing prices by 9.8% and 8.4%, respectively, although British Gas has extended its prize freeze until August.

The price increases come despite regulator Ofgem telling suppliers there is “no reason” for energy bills to climb.

A supermarket price war saw food prices fall last year but they’ve now increased for four consecutive months over the winter and last month stood at their highest level since June 2014.

Research by food and grocery experts IGD says rising food prices are the top financial worry for consumers. Its survey of 1,700 shoppers showed two thirds believe the cost of food will have an impact on their finances, compared with 58% who were worried about energy bills and 53% who expressed concern about petrol prices.

According to the Joseph Rowntree Foundation’s report, the cost of a basket of goods at the supermarket has gone up 30% since 2008.

This upward trend was reflected in the latest official Consumer Price Index (CPI) figures, which confirmed inflation reached a two-and-a-half-year high in January as rising fuel prices bumped up the cost of living.

Sterling’s slump against the US dollar and the euro since the EU referendum result, coupled with rising oil prices, also caused import prices to leap 20.2% over the period, the ONS said. These are expected to further push up everyday prices as companies pass on their soaring costs.

The ordinary working Joe might be forgiven for wondering where it’s going to end, particularly as recent figures show the growth of average UK wages has been next to zero in real terms since the global financial crisis of 2008.

ONS head of inflation Mike Prestwood said: “The latest rise in CPI was mainly due to rising petrol and diesel prices, along with a significant slowdown in the fall in food prices.

“The costs of raw materials and goods leaving factories both rose significantly, mainly thanks to higher oil prices and the weakened pound.”

Money saving website Petrol-Prices. com said it seems probable petrol price averages will rise by another penny or so per litre by the end of the month.

A spokesman said: “An apparent reluctance from the supermarkets to kick off a new round of the petrol price war, which is usually the driver for price reductions, means Brits are stuck paying more than they’ve paid for fuel in over two years.”

Adding fuel to the fire, the latest findings from the Moneyfacts website show that just 23 out of the 697 savings accounts on the market pay interest that can match inflation – around one in every 30 deals.

Steve Nowottny, news and features editor at Money Saving Expert, said tips to cut everyday expenses can be “worth their weight in gold.” He said: “With petrol and diesel, make sure you find the cheapest forecourt. If you drive a lot, consider getting a petrol cashback credit card – some can earn up to 4% cashback on fuel.

“It’s also possible to slash the cost of your weekly shop. Make the most of money-off coupons and vouchers – some even take it to the max and become ‘extreme couponers’.”

With petrol and diesel, make sure you find the cheapest forecourt. STEVE NOWOTTNY

Basket case: Supermarket food prices have risen for four months in a row.