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AIBU?

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Original poster

to question if the squeeze on living standards will not be temporary?

250 replies

bindud · 03/02/2022 17:53

"British families are facing the biggest squeeze on living standards for 30 years as surging prices and tax rises take their toll."

"The Bank of England forecast a 2pc fall in incomes after tax this year – the worst since its records began in 1990. In 2023, they’re set to fall 0.5pc."

Apparently things will get better in 2023, but will they?

We have the frozen income tax bands, ageing population, & most likely more wage stagnation after a decade of it after the 08 crash.

Is life just going to be more & more expensive going forward for the vast majority of people? or am i being too pessimistic?

OP posts:
Tiredmum122 · 03/02/2022 18:06

No, realistic. Brexit and ridiculously low interest rates are taking their toll. People will feel the pinch for a long time to come.

Stellaris22 · 03/02/2022 18:06

I can't see it getting any better with the Tories in charge. House prices are unaffordable, savings will be wiped out and it's going to be hard.

QuiteAtALoss · 03/02/2022 18:11

My energy bills are about to increase by £98 a month, not to mention food costs. I'm going to have to cut back substantially in all areas I can.

Blossomtoes · 03/02/2022 18:13

Definitely not being pessimistic @bindud. The next five years at least are going to be very tough indeed.

Thebestwaytoscareatory · 03/02/2022 18:14

Unless we take some drastic steps to redistribute wealth it's only every going to get worse for the many.

flapjackfairy · 03/02/2022 18:14

it is hard to see how we can avoid a recession going forward. Surely people cutting back to pay for food and energy means less spending on non essentials leading to businesses collapsing and rising unemployment. It is going to be a rough ride !

CovidCorvid · 03/02/2022 18:17

It's scary..

I bought my first house in the late 90s and fixed my mortgage at 7% interest which at the time seemed a good idea as I remember interest rates of 10%, 11%. Obviously house prices were lower.

The danger now is that we need to increase interest to combat inflation. I read today a 0.25% increase means 500 pounds a year more for the average mortgage. So if we end up back at 7% that would mean about 12k a year more on the average mortgage????? Which I'm assuming would lead to a massive property crash?

Will savings be wiped out? Obviously if inflation is high then yes. But if interest rates are raised to combat this then probably not. I paid my mortgage off a couple of years after buying my house due to compensation from a bad accident. I was then slightly annoyed as interest rates dropped and I got no interest on my savings and didn't have the benefit regarding saving on mortgage payments.

But I do think due to covid, brexit combo it's going to be shit for a long time.

latetothefisting · 03/02/2022 18:19

I don't think it will get worse for everyone, but we will see much bigger gaps between different sections of society - the top 1% will get significantly richer, and the gaps between them and 'normal' well paid professionals etc will continue to grow.

There will still be a fairly large middle class but more and more people who are just about doing ok now and who just miss out on extra support from the govt will slowly drop off the bottom rungs into struggling level. I'm thinking your normal workers in local govt/civil service etc who haven't (in my job at least) had more than a 1%, let alone a cost of living, pay increase in the last decade. Single people/single parent families who will struggle to pay bills without the 2 incomes of the "standard" household. Probably lots of others.

And then the ones who are already struggling will find it even harder, both from a money perspective and because the govt will shout from the rooftop about all the help they are giving them to encourage those in the squeezed middle above them to feel resentful and scapegoat them as being the route of all their problems.

CovidCorvid · 03/02/2022 18:19

I was talking to a friend today and our gym membership has increased by about 6%. Guess the gym have rising overhead costs.

But as peoples cost of living on essentials goes up and people have to cut back to pay fuel costs and rising food, petrol, etc a big luxury non essential like gym membership will be the first to be ditched. Then stopping eating out, stopping buying new clothes or not as much, not as many nights out. So those businesses go bust, more unemployment, bigger burden on the tax payer/govt. It's quite scary.

I'm also worried about rising demand for food banks and people not being able to afford to donate as much.

SilverDoe · 03/02/2022 18:31

I'm just really fucking angry. In a day and age where it's absolutely transparent that business are making billions upon billions of pounds of profit, avoiding tax and being facilitated to do so, the fact that an average family is going to have to suffer (not even taking into consideration all the previous years of austerity) for an indeterminate amount of time is insufferable to me. I really am devastated.

Original poster
bindud · 03/02/2022 18:46

Brexit and ridiculously low interest rates are taking their toll.

the low interest rates have also ridiculously inflated house prices

OP posts:
Original poster
bindud · 03/02/2022 18:50

The next five years at least are going to be very tough indeed.

It's so depressing,

OP posts:
Original poster
bindud · 03/02/2022 18:51

Unless we take some drastic steps to redistribute wealth it's only every going to get worse for the many.

that's what i think

OP posts:
Original poster
bindud · 03/02/2022 18:53

I was planning to move houses this yr

OP posts:
Original poster
bindud · 03/02/2022 18:56

I've already cut back on eating out/takeaways because if increasing food shopping

OP posts:
Original poster
bindud · 03/02/2022 19:02

@SilverDoe I'm angry too.

OP posts:
notanothertakeaway · 03/02/2022 19:29

When I bought my first house, the interest rate on the mortgage was 16%. Bad enough when house prices were low, but would be terrifying now house prices have shot up

ivykaty44 · 03/02/2022 19:57

In 1990 the interest rate on my mortgage was 15% and it came down for a year to 11%
Prices kept going up and house prices stalled for 7 years

Then change if government and university was promoted social mobility really promoted

As things changed people began to expect a different lifestyle, university, cars, meals out

Now that prices are rising, will people still be able to afford all those things?

Changedmane · 03/02/2022 20:16

Interest rate hike means it’s not temporary. That is a long term move.

Changedmane · 03/02/2022 20:19

Alot of people I know (who might look fairly affluent) have already cut everything there is to cut. Now rates and energy bills have risen, the only option is to work more hours, which is why several have got second and third jobs. The only blessing is that there are lots of jobs out there.

daimbarsatemydogsbone · 03/02/2022 20:21

You're right OP, we are doomed, everyone has replaced "the future" with "going forward" - I can't stand any more.

colouringindoors · 03/02/2022 20:24

I'm struggling to work out what else I can cut - but I have to. Minimal heating, some very cheap dinners, no takeaways, cafe trips. Feels very bleak.

Blossomtoes · 03/02/2022 20:27

@daimbarsatemydogsbone

You're right OP, we are doomed, everyone has replaced "the future" with "going forward" - I can't stand any more.
You’re going to have to stand considerably more. This is just the beginning. Welcome to the neo nineties.
HeyBlaby · 03/02/2022 20:30

Oh it will be temporary, we're transitioning into a high-wage economy, Boris said so!

ivykaty44 · 03/02/2022 20:31

£1091 is 3% on £230000 average house is £270k

If the interest rates rises to 6% £1472

Along with fuel at the pump £1.50 a litre and electricity and gas going up by £50 a month on an average size house. Shopping is going up for food by 7/10% realistically

People won’t be having the holidays, meals out, nails, hair doos etc