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.

What you see is very subjective, but my husband kind of analyses sales trends at work. For example you'll go to morrisons and say "what COL? There's loads of people here". Yes, they are here, because they stopped shopping in local tesco, spar, nisa etc. to save some money. Everyone's impacted somehow, but it's not like everyone goes hungry.

We’re tightening belts but we’re fortunately not in poverty.

• I would still go to a restaurant- but once in 6 months not once in 2.
• I say no to the kids more often.
• The heating was not on in October. I have begrudgingly said it can go on in November for very limited hours.
• food shopping is £130 a week rather than £90, so we’re looking to ditch some of the fresh fruit and veg (our main expense) for frozen and tinned.
• holiday childcare and out of school care has been rearranged to cost less.
• most of our money goes on activities for the kids. I could save vast amounts by cancelling those - but I won’t because I can still manage.

To build upon this... poorer people shopping in Tesco today may trade down as CoL bites. Either to value products in store, going without certain things they can do without or move altogether to discounter stores.

But!
There are plenty of people today who's plan to 'trade down', will be to not buy a new car this year or not go on that second city break holiday or not eat out every other weekend.
They'll save thousands based on these choices and then spend extra hundreds buying premium supermarket stuff from the range or trading up to Waitrose to enjoy a bit more everyday luxury. They've still saved thousands making choices in other areas of their lives. This is their plan to tighten their belts.

Whilst many will, not everyone will be queuing up to by value baked beans in Aldi to make ends meet. Not by a long shot.

Not everyone is on a tight budget. We have one last mortgage payment then we are done for instance, newish house that takes very little to heat, he's on a higher income so you will see us in restaurants etc I feel I'm supporting the staff who work there!

This is what I don’t understand - we need the private sector to create the money that funds the public sector so why not support people at the sharpest end more? I am saving to buy a home which would reduce my rent ( mortgage would be lower ). That surplus money would go into buying insurance, a vehicle, meals out, etc. Instead, I have to keep everything very modest. I have tried really stripping back on everything but feel that I don’t look polished/ smart enough at work.

We are ok (good salaries/bonuses, fixed 1.29% mortgage until may 2027) and have savings but all our savings (and more) will be wiped out on the works we need to do on our house. Plus 2 kids in nursery.

Id say we’ve definitely been changing our behaviour - no longer eating out/getting take away, really looking at the food shop and trying to cut it down, shopping around what we can use from having grown in our garden, being stingy with the heating/hot water, questioning purchases more etc so it is “affecting” us in that way, whereas before we used to eat out loads and not bother worrying about what we put in the trolley

if we didn’t have the works to do then I think we’d scrutinise less though

I've noticed the food shop has risen quite significantly, Iceland's chairman was on radio 4 this morning claiming prices are set to rise even further. Locally a 6 chain restaurant business has filed for liquidation, I think some sectors are going to be hammered over these next 12 months.
To counter that, the government knows UK households have saved an extra £190bn during lockdowns.

I'm noticing it already,food bills and energy especially,already dreadi g april when government help disappears,wasnt helped by being given notice by my landlords after 5 years,all my aavings went on flooring in new rental and bond etc,i was on a fixed rate til September 24 in old house but wasnt allowed to carry it over to new house so on the over double standart rate.

Could be that people are doing more frequent small shops rather than one big shop where you get some food waste.
Another reason could be a lot more people deciding to go to the shop in person, rather than pay for a delivery?

Possibly people are buying early for Christmas to spread the cost?

I’ve been into Liverpool a couple of times in the last month or so and was genuinely shocked how busy it was. Primark is always busy - but it was so busy they had a woman with a sign on a stick to show the end of the queue. We couldn’t get in anywhere for lunch as everywhere was busy. I genuinely described it as like being at a festival or football match it was so packed.

Maybe people aren’t spending though, and are just window shopping. I don’t know. But it did seem noticeably busier to me.

my mortgage fix is up in January, i'm burying my head in the sand for now, i won't worry about something that I have no control over

10 years ago we'd have been in serious sh*t as we were in the red every month because our wages didn't cover our (very basic) outgoings... and that was with no holidays, no drinking or going out, no new clothes, etc, just basics like food, petrol, home insurance, £280 mortgage, cheap phone, etc.

This year though we've actually spent more than ever so far, and have spent in the region of £25K alone on 3 x 1 week holidays abroad, plus 2 x 2 week holidays abroad (1 short-haul, 1 long haul) as well as a big party, which really isn't how we usually live (these were our 1st holidays in over 6 years).
Sounds weird, but it's true...I've not found it easy to spend so much on things that aren't essential as it isn't in my nature after being careful with money for so long, which is probably why my dh took it upon himself to organise it all.

There was a reason for the change in our spending habits though, which are normally quite frugal.
To cut a long story short, my dh decided to enjoy life after working ~70+hr weeks for the last 7-8 years because he had a really serious health scare around Christmas 2021, and then I had similar, so he booked all these events as surprises for me to create some memories for us.

I'm still concerned about the future because although my dh brings home 6 figures, all it takes is a job loss, and we'd be in trouble as our mortgages alone now come to almost £2,500.
Luckily, we fixed the majority of that payment for 10 years last year at a really low rate, although abt £500 of that £2500 is in a different fix, which runs out in 2025.

We're extremely fortunate in that we can absorb the price rises so far, but I still worry about the future as I know how quickly things can change, so now we've had that splurge, I'm looking for ways to cut down/save money.
With that said, I'm conscious that if we stop spending too much, that could, over time, have a knock on effect on the businesses we use, especially the smaller ones, which I also don't want as I do feel a responsibility towards them.

I also really fear for friends and family who aren't as fortunate, so we try to help where we can.

@ChiefWiggumsBoy

how many of those shoppers would have previously shopped in more expensive shops, though? They have downsized and are now going for the cheaper option. It’s the shops one step up who lose out as consumers it their budgets.

adjust not it😁

We've just bought our first house and relocated to a cheaper area so we actually feel we have more money at the moment.
Mortgage fixed for the next 5 years at 2.5% which is £450 cheaper than our London rent was.
Council tax is £50 cheaper, car insurance £40 cheaper etc.

We're much better off now which is why we moved.

It's never a good idea to try and assess people's finances through snapshots. Supermarkets being packed is a particularly bad barometer, because everyone has to buy food.

Holidays and anything that might have been rescheduled are also very unreliable. There are people who've gone on holidays this year that were booked and paid for in 2019. That might as well have been a million years ago, for all that it tells you about a person's circumstances now.

The same principle applies, albeit for a shorter period, for mortgages. A person buying now likely secured their rate months ago, or be porting an existing mortgage fix that they got years back. There won't be many sales happening at the moment with the new 6% rates. Plus everyone has to live somewhere.

But other than that, as lots of posters have already pointed out, people start from very different positions and one person's luxury is another person's belt tightening alternative. The local £30 per head Italian might be booming because people who used to go to the £50 per head one have downsized. You can't tell simply from one detail.

Additionally, you're not seeing the people who aren't in the shops because they've nothing to spend, who aren't posting on social media about the holidays they've not been on. It's a biased picture.

We're actually saving money, the government energy payment is paying for our electricity, we got this month's automatically put on our prepayment meter yesterday and still had some left over from last month so we've not had to pay any electricity which would usually be around £60 a month. Our supplier hasn't increased their prices at all which helps.

Not hit that much yet. Electric & Gas gone up a lot. But heating hasn't come on yet because it's too mild, so haven't had the hard hit yet.

Our local Tesco feels busier but it actually isn't. It feels that way because the queues are massive due to them only have 2 checkouts on.

Everywhere seems as busy as ever where I live which is a fairly average place in the South East.
On a personal level my family hasn’t been affected by the COL crisis. We are early 50’s, don’t have a mortgage, have an electric car so only spend £70 per month to charge it instead of £400 per month on petrol, we are retired so have no commuting costs, we eat out about four or so times a week and go on holiday 10 or 11 times a year.
We found things really tough when we were starting out and had young toddlers and a mortgage that cost 60% of our take home pay due to interest rate rises. I really feel for young families now and am lucky enough to be able to help my three adult DC.

We’re not struggling at all tbh (but feel uncomfortable because many people do). Combined household income of ca. £120k (South East), living frugally regardless. No expensive hobbies, not much eating out, cheap car. No holidays (just visiting parents in my home country twice a year, total cost: 4 return flights to Berlin). One DD at nursery at ca. £1,700 per month. Could probably live the same lifestyle on £70k. We put the savings aside for pension/ rainy day/ keep us out of the 40% tax band etc.

@Givenhud I'd be interested to hear what kinds of items you're buying in M&S, Lidl and Aldi instead of Tesco and how much you feel you're saving by doing this? We also use Tesco for weekly online deliveries and the prices have obviously shot up, so been thinking incorporating different supermarkets into our weekly shop. We both have pretty busy jobs and responsibilities so the online grocery delivery has been for convenience more than anything (and also I find it easier to control our spend this way), but wondering if it's worth making the extra effort to shop about, however time consuming that may be.

We're starting to struggle so I'm having to pick up extra shifts. The most obvious cost increases have been the food shop and the gas/elec bill. We've decided not to buy for each other at Christmas but just for the kids and extended family. Small sacrifices but last year they didn't cross my mind.

My salary has doubled since 2019. Brother and his wife are in the same situation.

Im in the SW and there are still many tourists around, mainly older so maybe that makes a difference, but coffee shops, gift shops etc busy. Although I have also seen lots of people spending on halloween items including pet items! I think many people are not affected and still have a large disposable income.