Cost of Living Crisis

[TwinklingFairyLights]

Is this not having much of an impact yet? I was in central Manchester on Friday and restaurants, pubs and bars were all full. I phoned to book a haircut and my hairdresser is fully booked for 2 weeks. I thought discretionary spending would be reducing by now but I can't see it.

China is in full lockdown. Concern is they've got a new variant but aren't telling us yet. Who knows.

I suspect people haven't quite been hit hard for very long just yet and are still trying to make the most of the end of covid restrictions and also the great weather we've had.

I've spent a lot of time researching cutting bills such as tv, broadband, insurances, driving less. I've saved about £600 per year just by being really savvy about that stuff. I'm being more choosy about where I spend my money too - choosing to spend in local businesses, still eating out but carefully (2 drinks rather than 6!). Doing more meals at home from scratch, packed lunches instead of school dinners.
I wonder if businesses like takeaways and taxis might feel it first?

I live rural and lots of smaller business around me have already closed or are closing down. I am spending money in the shops. But what is in my bags is different. I am preparing for winter with less heating. I'm buying extra blankets and thermal socks, rugs, gloves anything that will keep us warm ect.

I am also spending on diy stuff i'm the preparing the house for winter. I am blocking up drafts, filled in cracks, have added a water seal to the outside walls, insulated pipes, changed tired door seals, caulked around windows. I have become a bit obsessed with preparing for winter.

My income is £12,000 a year state pension. I own my little flat and have some rainy-day savings so don't qualify for any top ups. My weekly coffee and cake in our local cafe has gone up by over a pound so I've scrubbed that and I can't remember the last time I sat in a pub or restaurant. The biggest increase, for me, is food shopping as I used to get bogofs (don't see them any more) and prices of essentials all seem to have risen by double-figure pence. I'm dipping into my savings for everyday expenses, having days out on long bus rides (free travel pass and there's always someone who wants a chat!) and I don't need to buy any more clothes or books (thank you our wonderful library service). The future looks more worrying for my children and their families and I wish I could help them out but there you are. If and when your financial situations improve, please think pensions as well as holidays and new cars.

We don’t go out anymore, except for special occasions. We used to take the children to a cheap chain pub most weekends, and get a takeaway 3/4 times a month. We don’t do that either.
We are lucky enough to both have well paid full time jobs, but even so things are getting more expensive. It’s scary.

I'm not able to see friends as much, now that rail fares (even with a railcard) and the cost of hotels have gone up.

Rarely eat out now, apart from the odd occasion that I'm away.

Partner's friend works for one of the big banks and says credit card defaults are up big time.

Amongst our friends (mostly late 30s/early 40s), there's definitely an air of 'fuck it' we've been miserable for two years, let's live it up before things go really wrong.

It's renters that seem to be feeling the squeeze the most so far. We're in South London and our friend's rent has just been put up £200/month on a two bed. They are in shock as they've only been there a year. They looked at moving but there isn't anything cheaper.

We both earn well and recently had decent pay rises (me 6%, DH 19%), but we also recently bought our forever house so have a large mortgage (thankfully 5 year fix at 1.29%) and house needs a lot of work (we kept cash back to cover the major stuff but will have to save for the rest).

and we are concerned. Groceries have gone up noticeably, petrol etc. I am (not so much DH but working on it!) definitely much more conscious of what I’m buying and spending - dinners/lunches out have reduced a lot (esp as we’ve noticed the prices going up there too) and lots more cooking from scratch.

our only saving grace(s) are that we currently have nursery fees of 1800 a month, which drop to 1400 from our august pay packets due to free hours. Then reduce again to about 1100 from sept 2023 when DC1 starts school. By Sept 2025 they will be gone completely (though replaced by holiday clubs but not to same extent) and I am planning to increase my hours from sept 2023 also to swell coffers

keep telling myself re mortgage that when fixed rate expires (April 2027), even if internet rates have increased we should have headroom given no nursery fees and increased wages. But I’m still worried and going to try to squirrel away what I can between now and then

hard when DH doesn’t think there is any need to worry and spends because “it’s only 5” or “it’s only 20”.

I also worry for my parents, particularly with the increased gas costs - they are on gas and my mother has it tropical. My dad is also unwell. They don’t ever discuss their financial situation and just say they are fine whenever I ask, but I do worry

It hasn’t hit many people yet. Everyone I know, including my household, is out spending money as usual. The cost rises haven’t yet affected us, most of us got pay rises which cover all or some of it and we all have buffers anyway.

what we are doing is changing the little things, such as changing what food we buy so we can make cheap pack lunches during the week, and changing where we save money. We’ve started overpaying the mortgage so that we can bring down our loan to value % so we’ll get better rates when our current fix ends. We’ve started paying more into our pensions to bump them up as cost of living is likely to stay high so we’ll need more in retirement (in our early thirties so a long time to build them up).

That makes sense @MattDamon

I can't wrap my head around the price of properties vs average wages.

There are homes being built everywhere you look around here at the moment (which you'd think would be pumping money into the economy) They are either out of reach to buy for ordinary working people ( I'm thinking of my dd with her combined income with her partner of 45k) or they are social housing and they are not eligible.
And agreed, rent is crazy. £900+ a month for a one bedroom flat. Can't see any studio flats. £600 to rent a room.

Surely it was a bank holiday a couple of weeks ago on the Monday which would explain that.

It will not be affecting everyone in the same way. Take a couple in their 50’s. No mortgage, no car. So the energy bills will go up, but having no kids means they can just wear more layers, but the £20 extra a week (£1000 a year) isn’t really going to hit hard. There are lots of people who are doing OK without being super rich, but the media want to focus on those on their bare bones as it sells more papers. Not everyone is being severely affected.

And your point being? Why should it not be printed in the papers? Are the poor less worthy of concern? Or are you saying there will always be poor, so it's not news worthy?

I think the point is that if you see people out spending money on things you don't seem worthy that doesn't mean we aren't in a cost of living crisis that is harming those without assets, savings, excess in the monthly budget.

We have a reasonable income, but we have been through our accounts and cut out unnecessary spending - magazine subscriptions etc. We’re also Looking at broadband and other financial agreements. I want to make sure I haven’t wasted money when the fuel increase really hits in the winter. We are still spending when it brings joy into our lives, just bring careful what we buy. I went out for coffee the other day, but didn’t have cake. We’re still having takeaways, but ordering less.

Just a thought but I don’t think it will hit for a while as those who were paid full wage and/or sat at home working over lockdowns saved a fortune when everything was shut… so there’s that plus credit cards to back them up…

I’d say you’ll see the struggle with people who were forced to furlough or those on low wages/benefits first.

Also @TwinklingFairyLights my hairdressers is fully booked too - they can’t get trainees.

People are veering away from professions such as retail, personal care and hospitality because they want something stable where furlough or losing their job isn’t a threat….

What this means is hairdressers, beauticians, restaurants can be booked up - but can be due to staff reduction.

Equally there are a lot of people going out on party time at the moment spending what they saved or spending on credit to enjoy life.