Cost of living crisis - how are you affected? Is it just me?

[Eve223]

Name changed for this post.
How are people coping with the cost of living crisis? It is hard to believe there is one when the shops and supermarkets are packed, restaurants fully booked and people still taking expensive foreign holidays, buying new cars and houses etc. Are people just living on credit? Is it just me who has had to tighten my belt?

Genuine questions, not trying to be goady.

We are (old) so fortunate we went be impacted by mortgage increases.
We fixed energy prices last year so wont be impacted there until next October.

Dh is self employed and, after trying to absorb for a while, is now passing his additional costs (fuel and material) onto customers.

At home we have cut back on takeaways to once every 2-3 weeks instead of weekly. We watch carefully what we are spending in supermarket. Also, think twice before any other shopping, do we really need it or better to keep the money in the bank.

I have a couple of nieces in their 20s in their first homes, one due first dc, so keeping an eye on them to make sure they are coping and are aware they need to keep an eye on their finances and shout out before they resort to going into debt.

You just adapt, lots of people have been living in survival mode for years, the human race are very good at adapting, we wouldn't be here otherwise, our ancestors had it a lot worse, what would they think ?

I was lucky my mortgage was up for a refix last June: just as I was looking rates were starting to creep up very slowly, so I fixed at just £25pm more than my last. My regret is that I only fixed for 3 years! I should have fixed for much more than that. When that comes round again, I am resigned to it being up to £500pm more expensive. If/when that happens, it's going to hit my finances very hard.

The energy rises - when they happen next April - have the potential to do so as well.

Fuel has gone up but I just use the car less; it corresponded with me changing accounts at work from one that required a lot of travel to one that requires much less. I also used to take the dog to the woods everyday which was 16 mile round trip, but now just walk over the field behind the house, mostly.

In the meantime it's mainly food, but we tended to buy more expensive items before and now buy cheaper alternatives so that total cost has not massively increased (though the quality mostly has).

In short, it has affected us but in ways unseen to the world, I guess. And has the potential/porbability to hurt much more.

Not least on Nov 17th when the Tories are going to hike taxes again ("we all have to pay" is likely to mean low-middle earners will have to pay more, ime).

I’m also from the south west and constantly think the same thing.

I went to longleat in the school holidays and it was so so busy! Softplays are packed. Everywhere is always so busy.

I also know a manager of a five guys and they had their busiest week ever and ran out of stock recently which was a first time that had ever a happened to his store! And five guys is bloody expensive!!

This.
I thought the astronomical price of fuel would finish most people/business off. In years gone by a 10p increase has made national news and caused concern.

Somehow it’s gone up 60p and roads have been busy as normal, theres no widespread campaign to do anything about it and life has gone on. I can only assume people have enough money for it not to actually make that much if a difference.

I was at a five guys in Bristol over the weekend. I am not saying its not expensive for what it is, but it was £30 for me and DH. In the past, we would spend £40 on a meal in a restaurant so eating at five guys instead of a sit down restaurant is still saving money. We had travelled to bristol to help in a political campaign so were staying at a hotel and had to eat out.

Plenty of people won't be affected badly enough to change their lifestyles (yet?).
Middle and high income families who were comfortable will still be fairly comfortable.

We had our mortgage fixed for 5 years. Electric rates have gone up but we have reduced our usage by getting a halogen oven, turning the heating on less and having shorter showers - so our bills haven't gone up dramatically. We are still comfortable and can afford takeaways, days out, nice food etc. Most people I know are in a similar position - cutting back here and there but not significantly or that outsiders would notice.

You're not the only one who may be struggling, but saying that anyone who isn't is 'burying their heads' is incorrect. Plenty of people are actually fine.

I do know what you mean OP. Even with people where I know how much they earn such as my best friend who has just had an extension started and bought a really expensive off road pram brand new, and booked a trip away to also they’re trying for their 4th baby. I know their mortgage is high as she has talked about it but seems they have . Also work with a woman who’s just been on her fourth holiday or so this year, single Mum who earns same as me, and has the most beautiful house she is always doing things to. See also the trafford center absolutely packed at half term, people with multiple bags of shopping, buying toys clothes etc. But I think if people have always spent money and never been that canny with saving and stuff, put things on credit cards, then they’ll continue to do that. You see a lot on here people saying they’re skint and can’t afford something like a car repair that costs £800 then it turns out as a couple they have loads of ‘untouchable’ savings. Also people saying they’re skint but they live in a really expensive house in an expensive area so to me that’s a choice not something that makes you poor!

Some people have plenty of spare money each month so will soak up the increases and continue living as normal.

Going by previous threads there seems to be quite a number of people on MN who believe everyone increases their outgoings to match their income so if you have £3k, £5k or £10k per month (net) coming in you must have near as damn it £3k, £5k, £10k going out,

A lot of people just don't live like that.

Obviously it's much harder and much less likely that there'll be anything spare the lower you go but don't underestimate the number of people who aren't struggling.

the thing is, it may feel counter intuitive for many people to scrimp and save in a time of high inflation. my DH always tells me the story about how he diligently saved his pocket money as a child. He ended up with a load of 50p coins. When inflation is 10%, the value of any cash you can save vastly diminishes esp when you are talking about hundreds rather than thousands. not talking about people on the breadline or not having a savings buffer; but the attractiveness of saving an extra hundred quid may have diminished for a lot of people compared to what they are able to get for that money today (which they may not be able to get tomorrow). we can still afford weekend breaks so we are doing them now.

My mortgage is still fixed for a couple of years but I've definitely noticed a big increase in the cost of food, toiletries and clothing.

I'm trying to make cuts where possible and I'm avoiding putting the heating on for as long as I can. It's definitely a concern for me to think about how much worse it's going to get over the next couple of years.

Have you noticed as well all the bbc articles about ‘I have to skip meals so my kids can eat’ or ‘I wear three coats as I can’t heat my flat’ are almost exclusively about benefits users who cannot work - highlights that really who actually struggles in times like this are those who are the most vulnerable already. The only exception is usually single parents who get no support from the other non resident parent and pay for everything on one income including childcare so they can work, that is an extremely difficult way to live unless you have a very well paid job.

www.bbc.co.uk/news/uk-scotland-edinburgh-east-fife-63401596

• this is an example.

whilst the guy in this story is struggling horribly, there are people who can afford to give away good quality coats and who can afford to volunteer their time to run the scheme. So it highlights the most vulnerable suffering the most again

OP you're probably just hyper-noticing it because it's jarring to you.

Consumer spending in the UK is down according to all indexes - Deloitte, ONS, etc.

I mean you see stories about businesses closing, right? You see the shops in your town centre go bust and lie empty? So you know that they didn't get enough trade to be able to keep going.

Maybe that's why the ones left are busy? There's fewer places to shop after all.

Your own perspective can fool you in a number of ways.

The main issue for us is our mortgage payments which have increased by £300 per month. However, we have enough income to cover it, and the price rises generally. It means we have less disposable income but not to the extent we’ve stopped doing things. We’re luckier than many people.

@GuyMontag shops close in my town but are replaced with hairdressers, nail salons and restaurants or pizza shops all of which do well. I think the death of the high street has less to do with people having less money and more to do with online shopping, big retail parks popping up everywhere and places like the trafford center, which is almost always heaving

I think this is the key.

If mortgage or rent / energy / food / petrol etc account for 90% of net pay, when those things go up the impact is very real and cuts immediately need to be made in every day living.

But if those things account for say 30% of net pay, then the rises are still real for these people, it has nothing to do with living on credit, it just doesn't change things massively day to day.
It might mean you put £15k/yr into your ISA's instead of using the the full £20k tax allowance each year. Or holiday once instead of twice.

It's unpopular to mention this on MN though, think it's interpreted as goading or bragging or bullshit - but it's facts. Some seem incapable of comprehending that others have very different earnings / spending / saving / equity strategies to them.

Some people have a lot of spare after bills, it will eat into that first before they feel the pinch. We have a decent long term fixed mortgage and a lot of disposable income, so we haven’t felt it yet. Using this time to save up to mitigate it in future. That’s how!

@Blueeyedgirl21 aye, we're not going to build a strong economy with nailbars and pizza joints.

Consumer spending is down, has been throughout 2022.

Christmas will be the big divider I reckon.

Interest rates will almost certainly go up tomorrow and mid December. Sunaks high tax budget will come in the next few weeks.

The spending of Christmas and the high food/energy bills that will start to come in over the Christmas period will be the real eye opener for a lot of people.

We've had plenty of time to prepare for this and known most of it has been coming since August, but people will still spend for Britain/lob it all on the credit card and then emerge from Christmas in a panic.

The New Year is going to be a huge belt tightener for many people I believe.

we need decent plentiful subsidised nursery care, that will build the economy

I'd say me and dh are the lower end of middle wage and we can pay everything with a few hundred spare. But our mortgage is fixed )for another year) and our gas/elect hasn't gone up yet. So we are aware that we may reach a point of not having spare money and having to cut back. We have already started refucing electricity usuage and food to bring down costs. But yes I agree it's going to get worse and then when people aren't spending the businesses will suffer, people will lose jobs it will all have a knock on effect. I know I'm lucky though.

@GuyMontag I’m not saying we will I’m just saying that traditional high street is dying off for a lot of reasons and where I live, an affluent suburb, people still have a lot of spending money as is evidenced by how busy shops are and how many holidays etc people I know are taking. Obviously different areas will be different that’s why we have averages.

@Blueeyedgirl21 I'm sure you know lots about your affluent suburb.

But consumer spending is down.

Spending online is only part of the picture. A lot of retailers have incorporated digital elements into their customer model and are broadening their scope that way. But still, consumer spending is down.

I agree it hasn’t hit everyone yet. If you’ve got a fixed rate on mortgage and electricity bills, it’ll take a while til you feel it.

Also many people ignoring the fact they can’t afford certain things (those not in actual poverty and who were previously able not to worry much) because after Covid people still want to “seize the day”.