inflation are you worried?

[wwthc990]

Just that really. In both our jobs we havent had a payrise in a while as both of us work in niche jobs but without massive pay increases. All this talk of energy prices going up and everything else becoming a lot more expensive is really getting to me. Does anyone have any tips or suggestions for how you've tried to save money or adjust your finances this year. We are not poor and are both in professional jobs but we also live in London with two small kids, a big mortgage and things are getting tighter and tighter.

No advice but just to say I think a lot of people are nervous, you’re not alone there

Yes I'm worried now. Single parent and so very grateful for the top up I get from the state as their father doesn't regularly support the children. Last night I reset the heating to go off an hour earlier. It's now on for half an hour in the morning. Half an hour at lunch h time (I work from home). And 3 hours in the afternoon evening. 4-7 pm. We go to bed around 9 when the house gets cold.

So glad it is mild at the moment.

You are right to be a little but nervous OP. However, I did live through earlier rounds of inflation and one thing it does do is to erode the real value of your loan. So if you are in a house you plan to stay in a while, whilst inflation going up is not great, it might not be all bad.

Yes, given the type of price rises we are seeing, it's very unlikely most wages will go up by anything close to that. And with things like utilities, you never see them going down in price ever again even if wholesale prices do - I've seen people say oh it'll be ok if it's in April because most people won't need to use heating going into spring... but of course the high prices will still be there come October/November and central heating needs to go on again.

I'm actually thinking I might have to reluctantly look for a new job. I currently work for a small business and absolutely love working there but there is just no opportunity for a wage rise. I live alone and having to pay everything from a single income is frightening. At least most households are sharing the rising costs between two or more wages.

For myself? Not really, we can cope.

For other people? Very. I don't think anyone in my close or extended family will struggle, but some of my friends might and then there's the rest of the uk that are going to struggle. So many are going to struggle and maybe lose their homes.

Yes, I'm very concerned. I'd say we already live quite frugally but money is getting tighter and tighter. The small pay rise I had is nowhere near enough to offset the increases.

I'm watchful and starting to get concerned yes. Our heating bill for November was bonkers and it's not going to be any less for December or January. I paid almost £2/litre for diesel filling up the car the other day (admittedly at a motorway services but still). And stuff that used to cost 70p in the supermarket is now £1.50 or more.

I'm self-employed and can't simply raise my day rates without warning, so I'm trying to take on extra work and find new clients right now. Which itself is difficult; since the first lockdown there hasn't been that much work in my game so I'm constantly scrabbling around for scraps.

I'm also trying to shave £ off costs here and there; using the car less, cooking cheaper meals and trying to knock a degree off the heating (which is tricky, as I live in a badly insulated single-glazed flat in Scotland!).

I thought that in the past, wages did used to go up in line with inflation but since 2010 that seems to have been abandoned.

@Brainwave89 We've actually moved into a new house last summer. But I dont really see how inflation erodes our debt if our wages dont increase - I am not saying you are wrong, just dont see how that would work in practice. We've had a massive wage stagnation since the last financial crisis. For example, my husband hasnt had a pay rise in the last three years (no one at his level has and he is their top performer) and his company just dont think they should give inflationary pay rises. I work in a university so did get a bit of an uplift but not enough to make up for all the price increases. So really our debt is just getting more and more expensive as everything else is getting dearer. It's just really getting me down

Well inflation is a lot higher on some items than the 6 or 7% thats being put out by the govt etc...tomatoes up by 17p for same size pack and also cucumber up by 12p....so tired of reading the same old tips about how to save money...lets just eat dust and do star jumps all day...!

I have noticed all the prices seem to have jumped up in the supermarket. I'm on payg meters for electric and gas and can't say it's particularly increased yet. I don't know if that's something they can do remotely (they aren't smart meters) or would need to come and adjust. But so far I'm not spending any more on energy than I was. And from the many threads on here I've read on the topic, I spend a lot less on my energy than people paying monthly etc. Hence why I've kept the meters.

I am lucky in that I have "spare" cash each week so it won't be a question of not being able to manage. More so it will affect what I can save or spend on other things. I am more worried for some other people I know, who do just barely scrape by and will really struggle.

Yes, I just feel like everything has gone up this year but a few hundred here and there which all adds up. I was trying to get some new furniture - new house etc and the dining tables that I had looked at in the summer (but decided to wait and save before getting it) are now £200 more. I can buy them second hand etc but it's the fact that they've increased by that much which sort of threw me. Same with clothes, food, energy.....but our employers dont seem to think we need a payrise. In fact, I have put in for a promotion but even if I get it, it will only get me back to where I was at last year.

this realy hasnt helped this morning www.theguardian.com/business/2022/jan/12/uk-households-suffer-biggest-fall-in-available-cash-in-eight-years

We need interest rate rises to stamp out inflation quick.

@Mouseonmychair but how does help if your salary doesnt go up but mortgages do?

The pound will strengthen

Yes I’m worried. We can afford it now, but the problem with inflation is that we might not be able to afford it in 18 months, particularly if inflation continues to increase rapidly.

I also worry that after so many years of low inflation we have forgotten the 20 to 30 percent years. Getting a 5% annual pay rise will feel great for many who have been used to 1-2%, and the reality of what that means in terms of available cash will be a shock!

The pound will strengthen

Which does bugger all to help normal people seeing their household bills going up. Any wholesale savings are not passed on to the consumer, yet the higher cost of borrowing will go straight on to mortgage SVRs.

@Mouseonmychair

We need interest rate rises to stamp out inflation quick.

......and make everyone's mortgages unaffordable....

Not worried in the slightest (lived through 13-17% interest rates on mortgage). Plenty of jobs about (unlike back then) ability to side hustle better (internet). It'll be fine.

I can afford it, and fixed income due to early retirement, for those saying about mortgages, you need to accept variable interest rates.
Savers have lost out too often, yet. Encouraged to do by subbing someone else’s mortgage, enough!

My work are suddenly losing a shitload of staff and I just got quite a hike of a payrise…I think my company has realised people are moving for better money as so many are worried about the increase in living costs. So my employer had decided if they want to hang on to us they need to increase wages by a large amount.

@Mouseonmychair

We need interest rate rises to stamp out inflation quick.

Given the causes of this inflation interest rate rises would have minimal impact.

@BashfulClam

My work are suddenly losing a shitload of staff and I just got quite a hike of a payrise…I think my company has realised people are moving for better money as so many are worried about the increase in living costs. So my employer had decided if they want to hang on to us they need to increase wages by a large amount.

Let's hope more employers are forced to do the same, to prevent staff voting with their feet. Read this earlier which is interesting. The public sector in particular will struggle to retain skilled staff unless there is a large payrise this year benchmarked against the private sector rises.

www.theguardian.com/business/2022/jan/11/workers-could-see-25-pay-rise-as-companies-fight-to-hold-on-to-staff

@PlantingTulips I think public sector has already been massively de-skilled over the last decade or so. I work in a public sector role - cant move but deeply regret my career choice.

@Ariela

Not worried in the slightest (lived through 13-17% interest rates on mortgage). Plenty of jobs about (unlike back then) ability to side hustle better (internet). It'll be fine.

For you, maybe (and that's good, obviously!).

If you're someone who is already living on the bare minimum with nothing to spare and doesn't have the time/ability to do extra work (kids, disability, already long hours, no skill to 'side hustle' on the internet), who has only ever had a mortgage at the record low rates of the last decade, it's going to be a huge and potentially catastrophic shock to the system.