Latest research from the Gas Safe Register reveals that almost one third (31%) of UK homeowners will skip their annual gas safety checks this year in attempts to reduce household costs. Heating expert and leading manufacturer, Alpha, believes a nationwide call to action is needed to address this imbalance and ensure gas safety remains an essential priority.
“The Gas Safe Register data is alarming and demonstrates yet further implications of the cost-of-living crisis,” says Alpha’s product engineer, Jonathan Kidner. “Gas safety checks in the home can prevent serious or life-threatening accidents including gas leaks, explosions, house fires and carbon monoxide poisoning.
While it was encouraging that the research also showed the majority (77%) of homeowners knew the benefits of regular servicing and maintenance, most notably performance and cost savings, it seems this awareness isn’t translating into enough action and is therefore an extreme cause for concern.”
Alpha argues one of the most important steps for homeowners is to arrange for a Gas Safe Registered engineer to undertake checks on all gas appliances, including an annual boiler service.
This will not only ensure boilers continue to run at optimum efficiency, but also identify any potential faults and ensure warranties and insurance policies remain valid. Homeowners can set reminders for boiler services via the Gas Safe Register’s Stay Gas Safe website.
Jonathan continues: “The boiler is one of the most used pieces of equipment in the home yet the perceived maintenance costs remain one of the main reasons people don’t book a service; our own research from 2021 indicated this being the barrier for 54% of respondents. This needs to change.
“The experts at Which? suggest the average price of a boiler service is just £80 which, when compared with the cost of repairing or replacing the most common faulty parts, could save homeowners anywhere between £30 and £219.”
Additional measures homeowners can take to remain gas safe include:
Undertaking visual checks to look for warning signs on unsafe appliances including lazy yellow flames instead of crisp blue; pilot lights which frequently blow out; excessive condensation on windows; and unusual dark marks/staining on or around gas appliances;
Testing and replacing smoke alarm batteries;
Installing a carbon monoxide alarm and familiarising themselves with the six key symptoms of carbon monoxide poisoning.
Jonathan concludes: “While some of these points may seem obvious or even repetitive, the Gas Safe Register research highlights there is a need for reinforcement.
“Only one in three homeowners knew house fires were a potential result of not having regular gas safety checks and less than half could correctly identify symptoms of carbon monoxide poisoning.
“This is a conversation we need to keep having until this knowledge becomes commonplace.
“We understand the collective concern about rising costs but the loss could be far greater if we do not encourage homeowners to act now and prioritise their gas safety.”
In response to the cost of living crisis, Fresh Start will be hosting a weekly community meal (Meet and Eat) on Wednesday evenings and Friday afternoons at Fresh Start Kitchen, 28-30 Ferry Road Drive – see flier (above).
This is for anyone you can think of who would benefit specifically from a free two course hot meal in a safe and welcoming environment.
We will begin the Wednesday evening Meet and Eat on 26th October, and this will run until March 2023.
Our Friday afternoon Meet and Eats are currently running as usual:
First Minister announces doubling of December Bridging Payment to £260
Families of an estimated 145,000 children will benefit from extra support this winter to help with cost of living pressures – backed by Scottish Government investment of £18.9 million.
Bridging Payments were introduced in 2021 ahead of the extension of the Scottish Child Payment to 6-15 year olds. The final quarterly Bridging Payment, due in December, will now be doubled to £260, meaning families will receive up to £650 per eligible child this year.
All children registered to receive free school meals on the basis of family low income are eligible and will receive this payment automatically.
Total Scottish Government funding for the Bridging Payments will increase to an estimated £169 million across 2021 and 2022.
This is in addition to the Scottish Child Payment which will be extended to all eligible under-16s from 14 November and will rise to £25 per child per week on the same date – a 150% increase in the benefit within eight months.
First Minister Nicola Sturgeon said: “I am proud of the work the Scottish Government is doing to tackle child poverty. The Scottish Child Payment is paid to eligible families and is unique in the United Kingdom.
“It started for under-6s at £10 per week per eligible child. In April we doubled it to £20. Five weeks from today we will increase it again, to £25 and will also extend it to families with children up to age 16.
“That is vital financial help for well over 100,000 children, delivered in time for Christmas. That is the sign of a government with the right priorities.
“But we need to do more because we know this winter is going to be really tough. Rather than looking forward to Christmas, too many families will be dreading it because they don’t know if they can afford to heat their homes or even pay for food.
“As part of our help to the poorest families over last year and this, ahead of rolling out the Scottish Child Payment to under 16s, we have made quarterly bridging payments of £130 to children and young people in receipt of free school meals.
“I am delighted that the Scottish Government will double the December Payment from £130 to £260.
“That will help put food on the Christmas table for families of 145,000 children and young people. I don’t pretend it will make all of their worries go away – no government with our limited powers can ever do that. But I hope this investment of almost £20 million will bring a bit of Christmas cheer to those who need it most.”
Bridging Payments were introduced in 2021 ahead of the roll out of the Scottish Child Payment to under 16s. The £130 payments are paid quarterly by councils on behalf of the Scottish Government. Families received up to £520 per eligible child in 2021 and will receive up to £650 in 2022. Bridging Payments support around 145,000 school age children.
Povery campaigners have welcomed the announcement.
The Poverty Alliance tweeted: ‘We welcome @NicolaSturgeon announcement today that the @scotgov will double the final Scottish Child Payment bridging payment, up from £130 to £260.
‘This will put cash in the pockets of those who need it most. This is how we #ChallengePoverty‘
Business activity across Scotland’s private sector contracted again in September, according to the latest Royal Bank of Scotland PMI® data. The seasonally adjusted headline Royal Bank of Scotland Business Activity Index – a measure of combined manufacturing and service sector output – was little-changed from 47.8 in August at 48.0, signalling a second consecutive month of contraction.
Despite easing, a high inflationary environment drove the latest decline in business activity and new orders, with the rate of contraction for the latter gaining momentum.
The challenging conditions meant that the degree of confidence further weakened during September. The latest reading registered a 28-month low, suggesting subdued performance as we progress into the final quarter of the year.
New business received at Scottish private sector companies contracted for the third month running during September. The rate of reduction quickened on the month and was solid overall. Inflationary pressures and the cost-of-living crisis were primarily linked to the latest downturn.
At the sectoral level, manufacturing firms reported the softest decline in factory orders in three months, while services providers reported their first contraction since March 2021.
Amid soaring prices and recession fears, overall activity expectations weakened for the second consecutive month in Scotland’s private sector in September. Business confidence hit a 28-month low, posting below the average recorded over the series history and much weaker than the UK-wide average.
As has been the case since April 2021, employment across Scotland’s private sector increased in September. According to anecdotal evidence, successful hiring was in part linked to fresh graduates entering the workforce. While the respective seasonally adjusted index improved marginally from the that seen in August, it was the second-lowest reading in 17 months.
The pace of employment growth in Scotland was softer than the UK average.
September data revealed a reduction in backlogs of work for the fourth consecutive month at private sector companies in Scotland. The rate of depletion quickened to the fastest in 20 months. Respondents frequently mentioned the fall in backlogs reflected fewer new orders.
The rate of reduction at Scottish private sector companies was quicker than the UK-wide average which, in contrast to Scotland, softened during September.
For the twenty-eighth month running, average cost burdens rose across private sector firms in Scotland during September. The rise was largely blamed on inflationary pressures in labour market and supply chains. Despite the rate of input price inflation remaining historically high, the latest incline was the softest since August 2021 with both sectors noting slower rates of inflation.
Moreover, the pace of inflation in Scotland lagged behind that seen at the UK level, posting the second-softest of the 12 monitored regions ahead of the South West of England.
Scotland’s private sector firms raised their charges during September, thereby stretching the current run of output price inflation to 23 months. According to panellists, prices were raised primarily to offset increasing costs. That said, the rate of output price inflation was the weakest in 13 months and the softest of the 12 monitored UK regions.
Source: Royal Bank of Scotland, S&P Global.
Judith Cruickshank, Chair, Scotland Board, Royal Bank of Scotland, commented: “Business activity and new orders continued to decrease across the Scottish private sector during September, thereby stretching the current runs of contraction to two and three months respectively.
“The squeeze on customer disposable incomes amid a high inflation environment underpinned the latest downturn in output and new business.
“Despite falling business requirements, firms raised employment for the eighteenth successive month, albeit at a moderate pace. The combination of a drop in new work and expanding workforces allowed firms to work through their backlogs.
“The post-pandemic boom is clearly at an end, as the ongoing cost-of-living crisis plays an increasingly important role. Moreover, the 12-month outlook continues to weaken.”
From small jobs to big changes, here are our top tips for cutting your energy bills
WHICH? consumer research found that in August 2022, 65% of households cut back, dipped into savings or borrowed money in order to cover essential spending. And with most people’s gas boilers whirring into action this month as the temperature drops, outgoing expenses are only increasing.
Our experts have identified a variety of ways to reduce your heating energy bills this winter.
The big things can drastically change how much energy you use every year, while the small things can cheaply make an immediate dent in your bills during a time where a bit of help goes a long way.
Sometimes it’s simply a matter of using a new boiler setting or spending 15 minutes plugging a gap in your home that provided a welcome breeze during the summer heatwave. We’ve also listed a few more expensive, longer-term fixes. If you do feel able to, it’s worth thinking about whether any of these could suit your home.
Read on for our top tips for getting ahead this winter.
Emily Seymour, Which? Energy and Sustainability Editor, said:“Many people will be looking to save money by reducing their energy use this winter. Some easy ways to cut your bills include using radiator valves to make sure each room of your house is only ever as warm as you need it to be.
“If your home has a single room thermostat, it should be set at the lowest comfortable temperature as heating bills will rise by about 10 per cent for every additional degree you turn it up.
“Combi boiler owners can try turning its flow temperature down and the preheat setting off. Tap water will initially come out cool before it heats up, but you’ll be wasting less energy.
“If you have a hot water cylinder, you can’t make use of low flow temperatures. Instead, insulate your hot water tank with a jacket no less than 75mm thick and make sure you’ve got lagging on pipes.
“Simple steps like placing weatherproofing tape over gaps or putting down a draught excluder can guard against heat loss.”
Boilers are easy to cast as a cost-of-living villain. They’re big, sometimes noisy, most of them run on fossil fuels, and they can have a big impact on your energy bills – in fact, in most homes the boiler is the one single thing that uses up the biggest portion of your annual energy bill.
But a central heating system that’s working efficiently and using energy proportionate to your home’s heating need is still the best way to heat your home during the coldest months of the year.
For most people, the priority should be making your boiler cost less to use, and not deferring to replacements like portable heaters.
There’s a lot you can do to make your heating run more efficiently:
Get your boiler serviced. This will reduce the chance of a costly emergency repair and keep a new boiler in warranty. Plus, a well-maintained central heating system will run more efficiently, and you can ask your boiler engineer about whether your boiler’s settings can be toggled to run more cheaply. If you rent, you are within your rights to ask your landlord to arrange a boiler service every year.
Toggle pre-heat off. Combi boilers use water on demand, but sometimes they pre-heat water so it’s ready to get to taps quicker. This is nice, but it will keep your boiler burning more than it needs to.
Bleed your radiators – or ask an engineer to do it if you prefer – and install thermostatic radiator valves (TRVs) onto them so you can turn radiators off in rooms you don’t often use (more on this below).
Combi boiler owners should look at their flow temperature. You can save up to 8% on your heating bill by turning down the temperature of the water that gets circulated around your radiators. If your boiler heats this water to its max, your boiler won’t even condense, which means it’s running inefficiently.
The Heating & Hot Water Industry Council (HHIC) recommends that people adapt their boiler settings with the advice of a boiler engineer. This is particularly true if you have a system or regular boiler that keeps water stored in a tank. Because stored water needs to be heated a certain amount to avoid Legionnella bacteria, you should only change settings with professional advice if you have one of these.
However, if you have a combi boiler, you’ve made sure it’s safe and you’ve checked your boiler’s technical manual, you can adjust these settings yourself.
This setting is accessible to anyone and it can be changed using your boiler controls. The flow temperature for heating is generally symbolised by a little picture of a radiator, and for hot water, a picture of a tap. Up and down arrows will change the temperature settings.
It recommends a 55°C setting, but we suggest starting a bit higher initially to see if you’re comfortable with the change.
3. Insulate your boiler’s hot water cylinder and pipes
if you have a boiler with a hot water tank, the advice above doesn’t apply. That’s because boilers that store water in a tank usually can’t manage the efficiency gains of combis as they’re not well suited to running low flow temperatures without modification.
You shouldn’t change the flow temperature of a regular or system boiler with a hot water cylinder without consulting an engineer, because your boiler must be able to pasteurise stored water effectively to avoid bacteria such as Legionella developing.
However, that doesn’t mean there’s nothing you can do to improve your boiler’s efficiency. You’ll be using a lot of energy to heat up the water in your storage cylinder, and you don’t want to lose out on any of that. So make sure the cylinder itself is well insulated. This can be as easy as buying a jacket for about £20. It should be no less than 75mm thick according to industry standards.
You can also lag the pipes that carry water around your home for around £5 a metre. Water loses a lot of heat in transit, so it’s a small expenditure for a good long-term saving. It’s particularly useful to do it for the pipes coming in and out of the cylinder.
Lagging pipes will also reduce the risk of them freezing in a cold spell, which can be costly to repair.
Smart technology isn’t for everyone, but if you do like using your phone, tablet or voice assistant for managing your home, then a smart thermostat will give you easy and precise control over your central heating.
They’re designed to provide automation to help you use your heating at the best times. Whether it’s toggling your boiler when you’re nearby to benefit from it, learning your routine so it can predict the optimal times to run or even checking the weather forecast to anticipate increases and decreases in heating need, smart home heating is becoming increasingly clever.
While many of these features are designed for your comfort, rather than your wallet, smart thermostats really come into their own when it comes to making savings if you set up zonal heating with compatible radiator valves.This means you can vary the routine and temperature of different rooms so you’re not wasting energy by heating rooms at the wrong times.
For example, you might want to programme your kitchen to get a burst of heating in the morning before you put the kettle on and your living room to be warmest in the early evening, while you’re happy for your bedroom to stay cold all day until you’re about to go to bed. All of these adjustments mean you’re saving crucial kilowatts by never heating a room you’re not actually using.
Since the introduction of new legislation in 2018, new gas boilers need to come with one of four energy-saving add-ons. Smart heating controls are one of them. But if you have an older boiler you can still buy and install a smart thermostat separately.
If smart tech isn’t for you, you can still make significant improvements by installing manually operated thermostatic radiator valves, or TRVs. They control the heat of your home by adjusting how much hot water flows through the radiator they’re fitted to, so you can make sure each room of your house is only ever as warm as you need it to be.
It works by sensing the room temperature and opening or closing the valve as appropriate.
The numbers on TRVs determine how much a radiator is allowed to heat up. They correspond more to a level of comfort than a specific temperature, but as a rough guide the following applies:
0
Off
* (the maintenance setting)
The radiator will turn on as a protective measure when the temperature nears 0°C.
1
Approximately 12°C, a low room temperature for an unoccupied room
2
Approximately 16°C, a lukewarm heat for an occupied room.
3
Approximately 20°C, a comfortable heat for an occupied room.
4
Approximately 24°C, a warm heat for an occupied room.
5
The valve is fully open.
Use trial and error. We recommend using settings two and three to try and cut heating use, knowing that you can go higher if you’re feeling chilly.
If you’ve also turned down your boiler’s central heating flow temperature, you might find you need to open your TRVs to higher settings to reach comfortable temperatures.
Smart radiator valves can work with smart thermostats to do this automatically. Some of them also take temperature readings to fine-tune your thermostatic system.
6. Turn your thermostat down a little
It’s age-old advice, and for people who are already frugal with their heating it may not apply. But each degree you turn your thermostat down is energy saved. According to the NHS, temperatures as low as 18°C are healthy for most people.
The Energy Saving Trust claims that turning your thermostat down by one degree can save you up to 10% off your heating bill. Realistically, a lot of variables affect this, but even one degree lower will move your bills in the right trajectory.
For older people, Age UK reminds that very low temperatures can increase your risk of flu or other breathing problems, and can raise your blood pressure. When you’re older, your blood pressure takes longer to return to normal once you get cold. Try to make sure you’re keeping at least one room at a comfortable temperature for you, and keep the doors closed as much as you can to keep that room as warm as possible.
7. Only use electric heaters sparingly
We’re often asked whether people should turn off their heating completely and replace it with electric heaters. Unfortunately, it’s unlikely to be cost effective over long periods of time.
Portable electric heaters use electricity to warm the air by convection, either with an exposed heating element, or with a radiator design that transfers heat from the element through a system of fins.
They are great at providing a quick heating fix for a short period of time, such as for a 10-minute blast on a particularly freezing morning. And if your central heating system isn’t working, they’re reliable back-ups.
It’ll take a portable heater between 15 – 30 minutes to raise the temperature of a medium-sized room by 10ºC at full blast. After that it will toggle on and off as needed to maintain temperature, based on its thermostat.
Remember that you pay for energy by the unit. With the current price cap, electricity is much more expensive than gas. So be prudent when you use your electric heater in place of gas.
They usually have rated outputs of 2 or 3kW – that’s how many they’d get through in an hour on full blast. For reference, that’s about the same amount of energy as a kettle. Heaters do generally have settings that let them run at lower outputs too.
If you’re on a standard variable tariff, the average unit price for dual fuel customers is 34p per/kWh for electricity and 10.3p per/kWh for gas. That means that a 2kW portable heater at its full output would use 34p of electricity every half an hour.
If you’re short on cash, there are things you can do right now to plug in gaps in your home and hold onto your heat.
You can draught proof any gaps in your home, whether that’s keyholes, postboxes, door cracks, cavities near doors and windows, or gaps around electrical outlets and pipes. Just remember that homes do need some ventilation, so make sure you leave any purpose-built vents clear, such as window trickle vents or grills in wodden flooring.
Draught-proofing may involve putting down tape or a draught excluder where there’s a draft. Even something basic like a door snake is a help in the war against heat loss. Many of these solutions cost less than a tenner, or can be homemade.
Other tools include:
Adhesive weatherproof tape made of PVC or foam to go around doors and windows.
Threshold seals to go on either side of doors.
Letterbox excluders with brush pile material.
Thermoplastic rubber (TPR) to fit flexibly into door and window cavities.
Pillows designed to fit inside an open chimney to block off draughts when it’s not in use.
One visit to a DIY shop can provide you with several small solutions that don’t break the bank and can be installed yourself.
While individual draught-proofing measures are unlikely to save huge sums from your energy bills in isolation, collectively they will make your home feel more pleasant and cosy to be in. You might even find you can comfortably turn your thermostat down a degree.
In the long run, the key way to keep energy bills low is to trap as much as possible of the heat we generate inside our homes.
If you have the money to do it, insulation is a very good long-term investment. As energy bills go up, the time it takes to see a return on your investment becomes shorter. The Energy Saving Trust estimates that having a professional install loft insulation in a typical semi-detached home would cost around £480 in October 2022, but once it’s done you’d save £355 a year on your energy bills. So in less than 18 months you’d be making a saving.
Professional installation in a detached home would cost more – around £630 – but the savings are as much as £590 a year. And you’ll be saving around 1,000kg CO2 emissions from being released.
So it’s a win-win: you’ll waste less energy and be able to run central heating more cheaply – and break even relatively quickly.
Plus, you’ll be ready for whatever comes next. The central heating options of the future will operate more cheaply if homes can retain heat. Technology like heat pumps are able to operate efficiently because they’re designed for well insulated properties.
Floor insulation usually comes next, and it can reportedly reduce heat loss by 15%.
Cavity wall insulation is useful for properties built in the last century. It’s injected into the gap between your outer and inner walls.
Solid wall insulation can be placed within or outside a wall that’s not eligible for cavity wall insulation. It’s very expensive to install, so a longer term investment.
The energy efficiency of your home or of the home you’re renting is quantified by an EPC certificate. Find out how to get assessed and what the ratings mean here.
10. Update windows with double glazing or alternatives
Windows are a source of heat loss in any home. But if you have single glazing, you’ll notice you need much more energy to heat your home sufficiently. Double or even triple-glazing windows will reduce your heating needs dramatically.
Installing A-rated double glazing could save between £95 and £115 a year on the heating bill of a typical home. However, it doesn’t come cheaply.
We ask Which? members to rate the double glazing companies they’ve actually used.
If you need a quick fix and don’t have the money to spend, window foam seal, foam sealant or metallic brush strips can all help.
We’ve tested secondary glazing film in the past, like clingfilm for your windows, but we thought it wasn’t very resilient. It also needed re-stretching with a hair dryer periodically.
Thick curtains across windows can make a big difference too. Drawing them creates a barrier between your room and the elements and keeps your heat inside.
11. Explore home grants
If you’re replacing your heating system, the government’s Boiler Upgrade Scheme helps you to decarbonise with a heat pump if your home has no outstanding insulation recommendations.
With the latest price cap, a heat pump needs to run at an efficiency of 280% to have parity with a gas boiler’s running costs. Heat pumps can run at 300-400% efficiency, so they can prove cheaper to run.
Other grants can help if you’re in a vulnerable situation, such as:
Cold weather payment to top-up your energy bills during cold snaps.
Winter fuel payment to help people born before September 1955 pay their energy bills.
Fuel Direct lets you deduct essential bills directly from income support, Universal Credit and other assistance available to you. The amount is decided by Jobcentre Plus or your pension centre.
The government’s 2022 Energy Price Guarantee and Energy Bill Support Scheme will both provide households in the UK with a bit of extra help this winter.
Aldi has been crowned as the cheapest supermarket to pick up your child’s packed lunch essentials from.
Consumer finance experts at CashLady.com conducted research into the prices of key packed lunch essentials consisting of fruit juice cartons, yoghurts, fruit, crisps and all the ingredients to make a delicious ham and cheese sandwich.
The supermarkets were then ranked from one to nine in terms of their value for money, with one being ranked the cheapest and nine being ranked the most expensive. The items included in the costings included:
Bread
Cooked Ham
Cheese
Tomato
Lettuce
Banana
Crisps
Yoghurt
Fruit cartons
If you’re looking to whip up a balanced packed lunch for your child, to keep them fueled throughout the school day, the research has revealed that Aldi is the best place to shop.
At Aldi, for just over £7, you can get all the packed lunch essentials to feed your child for a week- that’s £1.46 per day.
However, ranked as the most expensive supermarket is M&S, where the same packed lunch essentials will set you back over £18, followed by Waitrose at a costly £14.85.
Supermarket
Price
Ranking
Aldi
£7.32
1
Tesco
£8.23
2
Sainsburys
£8.33
3
Asda
£8.43
4
Lidl
£8.52
5
Morrisons
£11.48
6
Co-op
£14.10
7
Waitrose
£14.85
8
M&S
£18.55
9
Commenting on the findings, CashLady.com’s Consumer Finance Expert, Dan Whittaker said: “There’s a lot you may be needing to budget for, from school uniform and stationary supplies to packed lunches. Plus with the cost of living crisis upon us and energy bills about to soar, there’s no better time to save where you can.
“We’ve crunched the numbers to find the cheapest supermarket for packed lunch essentials so that you can serve up your children delicious, nutritional lunches whilst still keeping to a strict budget.”
Not all households are equally affected by rising prices. New ONS data for the UK released in August divides price indices, expenditure shares, and inflation by income quintile, retirement status, whether or not households have children, and residence type.
As many have anticipated, the households that earn the least are feeling the effects of rising prices most keenly, Chart 1.
Chart 1: Relative CPIH price indices by income quintile, 2005-2022
* Indices are differenced from the index for households in the third quintile (the reference group). Source: ONS
The first quintile (the lowest-earning 20% of households) faced an effective annual inflation rate of 9.8% in June, compared to 9.0% for the middle quintile and 7.9% for the highest.
Resolution Foundation’s forecast estimates that households in the lowest income decile will face inflation of 15% by October, while inflation will be 11% for those in the highest decile. The difference in price indices across the income distribution are not new, but they have spiked this year. From 2013 to early 2022, the price index for the first quintile was about 2 points higher than for the third quintile. By June 2022, that difference had grown to 3.5 points.
In comparison, the cost-of-living crisis has impacted the highest earners least.
Household spending patterns drive different effective inflation rates across the income distribution. Food, fuel, and housing make up a larger proportion of spending for lower-income households than for higher-income households.
The largest contributors to rising inflation are housing and household services, transport, and food and (non-alcoholic) beverages. The share of expenditures on these categories falls as income increases, Chart 2.
Chart 2: Expenditure shares on selected categories by income quintile, Feb-Dec 2022
Source: ONS
This year, fuel, food, and transport comprised 64% of the expenditure of the lowest-earning quintile. The highest quintile spends 55% of expenditures on the same categories. Lower-income households are also more likely to use pre-payment meters, and cannot spread costs across the year. High energy prices are more likely to result in reduced consumption during the winter for these households.
How does inflation affect real incomes?
Price inflation erodes real disposable incomes. In August 2022, the Bank of England estimated that real post-tax incomes will fall by 1.5% in 2022 and by 2.25% in 2023. In a recent report, the Resolution Foundation concluded that rising inflation will wipe out twenty years of real earnings growth.
These effects are not evenly felt across the earnings distribution.
In addition to facing higher inflation, the lowest-earning households have seen a drop in year-on-year nominal earnings growth this year compared to higher-earning households. This slower wage growth will compound the effects of higher experienced inflation.
Cost-of-living for retired households and households with children
Household composition may also change how households experience changes in the cost of living, also due to differences in the composition of expenditures.
Retired households typically face higher inflation than non-retired households, Chart 3. The inflation rate for retired households has been about 0.4 percentage points (pp) higher than for non-retired households since March. This trend highlights concerns about pensioners rationing fuel this winter.
Chart 3: Inflation by household composition
Source: ONS
Unlike retirement status, whether or not a household has children does not materially change the inflation rate they face.
Cost-of-living for renters and homeowners
Housing costs contribute to rising inflation, but the rates faced differ by residency type, Chart 4.
Chart 4: Relative CPIH price indices by resident type
* Indices are differenced from the index for owner-occupier households (the reference group). CPIH indices include housing costs. Source: ONS
Similarly to price indices across the income distribution, the price index for social rented sector tenants has spiked in 2022 compared to private rented sector tenants and owner-occupiers.
In June 2022, inflation for social rented sector tenants was 11.2%, compared to 8.2% and 8.6% for other renters and owner-occupiers respectively.
The most likely driver of this difference in experienced inflation is food costs rather than housing; social rented sector tenants spend 16.3% of expenditures on food and non-alcoholic beverages. The same share is about 10% for other renters and owner-occupiers.
Subsidised renters spend a smaller share of their expenditures on housing, fuels, and transport, so these are not likely sources of the difference in inflation rates. Regardless, subsidised renters are likely to be relatively low-income, and concerns about reduced food and fuel consumption, particularly in winter, are still salient.
Rising rent and mortgage rates are also likely to exacerbate pressure on household budgets, particularly for new homeowners.
Do proposed policies to combat the cost of living address distributional inequalities?
Both the UK and Scottish governments have announced policies to tackle the cost-of-living crisis, but it remains to be seen if these policies will effectively target those most impacted by inflation.
The £2,500 price cap announced by the UK government in September is guaranteed for two years and applies to all households equally. A £400 discount on energy bills starting in October and the cancellation of green levies on fuel are also universal.
A £15 billion support package announced in May provides one-off payments of £650 to low-income households on certain types of benefits, £300 to pensioner households, and £150 to individuals on disability benefits.
Scottish Government has also recently announced policies that target the most vulnerable households. Initiatives include a rent freeze and a hold on increases to ScotRail fares. The rent freeze in particular may help some in the short-term, but is likely to reduce rental property supply and quality if not carefully implemented.
Some previously-planned policies, such as increasing the Scottish Child Payment from £20 to £25 per week, per child and extending the benefit to under-16s, will also help households with children to manage rising costs.
The full distributional effects of the the cost-of-living crisis and the UK and Scottish governments’ response remain to be seen.
As a part of this year’s #ChallengePovertyWeek, we wrote a blog where we explain why women are being hardest hit by the cost-of-living crisis & discuss actions that need to be taken to #TurnTheTide on women’s poverty.
Stark research findingsreleased today by national charity Family Fund show that families raising disabled, or seriously ill, children and young people across the UK now face serious financial jeopardy and are struggling to survive, due to the scale of the cost-of-living crisis.
“The Cost of Caring” covers research with 4,264 families across the UK, with a disabled child, showing that nine in 10 families are struggling, or falling behind on their regular household bills and many are forced to forego living essentials such as food, heating, basic furniture like beds, flooring, washing machines and fridges, to try to make ends meet.
Over half of parents and carers (54%) report skipping or cutting the size of their meals because there wasn’t enough money for food (a 9% increase since September 2021) and more than one in ten (13%) say they have had to cut back on items that are essential for their disabled children.
Four in five families (83%) raising a disabled child or young person are in debt, with rising debt levels for two in five families (43%) polled, and over 40% report they can’t afford to keep accommodation warm – a 13% increase since last December.
On average, families raising a disabled child live on £17,000 a year and spend 60 hours a week caring for their disabled children, with one third caring for over 100 hours a week. Families receive only one hour a week of respite and support, on average, and less than one in four parents and carers are able to work full time, with over half not able to work at all.
Family Fund’s report highlights the, now, unsustainable strain on families raising disabled and seriously ill children and young people , as they try to cover sky-high costs on top of severely reduced incomes due to intense caring responsibilities, three times higher costs to look after a disabled child and critical levels of debt.
With sustained cuts to support services, which have not recovered post-pandemic, families are now having to pay, themselves, for therapies and specialist equipment for their children, such as educational and sensory items and toys.
As the UK’s largest grant-making charity for families raising disabled and seriously ill children on the lowest incomes, Family Fund provides essential goods for families including kitchen appliances, clothing, bedding, play and sensory equipment and much-needed family breaks.
Last year, it delivered over 170,919 grants and services, worth over £37 million, to families on low incomes across the UK.
Wider research findings include:
· Almost all families raising disabled children (98%) report paying more than families with non-disabled children due to specialist needs – clothing (74%), food and groceries (73%), technology such as tablets (66%), toiletries and hygiene products (60%) and replacing worn or broken household items (60%);
· In September 2021, families raising disabled children reported an increase in their household bills of, on average, £800 a year. By June 2022, even before current price rises, this increase was over £1,500.
· Three in five families (62%) reported cutting back on play, leisure and recreational activities with their disabled children during the last year;
· In the past year, 50% of families report their disabled children’s physical health has worsened and 68% say their disabled children’s mental health has deteriorated.
· 1 in 5 families report taking on more credit to keep up with existing credit commitments
Cheryl Ward, Family Fund Chief Executive, said:“The outlook for families raising a disabled, or seriously ill, child is now graver than ever. They are unsure how to cope with ever-rising caring costs with winter approaching, they are having to borrow more credit to pay for intense levels of debt and feeling more isolated than ever, with worsening mental and physical health.
“These are families on the lowest of incomes, due to caring for their children round-the-clock and having far-reduced available support services, post-pandemic.
“When caring costs have spiralled so far out of control that families are having to cut back on the very essentials their disabled child needs, something has to change.
“Along with our sector partners, we are urging Government to ensure that family benefits are increased in line with inflation, rather than reducing at a time when the escalating costs of caring are already jeopardising families’ lives.”
West Midlands parent:“How will I be able to keep my disabled child warm for medical reasons…this coming winter when I’m struggling to pay gas and electric in summer?
“How will I afford petrol, which I need as I have two children with physical disabilities including one in a wheelchair. And the cost of food, and availability of safe food for an autistic child if shortages start happening. I worry every day and night over this.”
North West England parent: “Caring for our child is not the issue, she is the light of our lives. Being able to access the right care, education and support in order to provide me the opportunity to work is the key.”
The Cost of Caring features research from the charity’s last four quarterly family polls, from September 2021 to June 2022, ahead of a new September poll coming soon.
Inflation-busting move will support customers in the run-up to Christmas
Price lock underlines Tesco’s unwavering commitment to great value for its customers
Colleagues set to benefit too, with significant boost to hourly pay rates across UK stores
Tesco is today announcing a vast new price-lock commitment, freezing the prices of more than a thousand everyday products until 2023, and giving shoppers more ways to spend less and enjoy the festive season.
The products are all included within our mammoth Low Everyday Prices campaign, which covers a wide range of products and brands bought week-in, week-out – from cupboard staples and teatime favourites, to household and health & beauty products.
To help customers make their money go further during the festive season, we’re locking the price of more than a thousand of these products into the new year.
So whether it’s McCain Home Chips for those midweek dinners or a winter pick-me-up with Nescafe Original 3-in-1, our customers can count on Tesco’s price to stay the same until 2023 – helping them spend less on their shopping and more on friends and family this Christmas.
Low Everyday Prices is a key part of Tesco’s commitment to giving customers great value on their shopping – going hand-in-hand with our Aldi Price Match, great value own-brand staples with our Exclusively at Tesco brands and exclusive deals through Clubcard Prices, which together cover more than 8,000 products.
And it’s just one of the ways we’re helping customers make their money go further this Christmas. Our Clubcard Christmas Savers Scheme offers customers a bonus voucher of up to £12 when they save their Clubcard Vouchers towards their big Christmas shop. While our Toy Sale, launched this week, offers savings of up to 50% on kids favourites like Lego and Stickle Bricks, so that families can spread the cost of Christmas.
Tesco UK Chief Executive, Jason Tarry, said: “We know times are tough for many customers right now, particularly as we head into the winter months. We hope this extended price-lock commitment gives our customers the certainty of knowing that over a thousand household favourites will stay at the same great price for months to come – helping them budget when they need it most.”
As well as helping customers, we’re today also announcing another major investment in our store colleagues – with the second hourly-pay increase this year, and a doubling of our colleague discount to support them this Christmas.
From 13 November 2022, the basic hourly rate of pay in our stores will increase by a further 20p to £10.30 (or £10.98 in London). This means hourly rates at Tesco will have increased nearly 8% this year – building on what was already a record single-year investment in store pay.
And on top of that, we’ll also be doubling our Colleague Clubcard discount to 20% during the key Christmas shopping period from 13-19 December.
This is just one part of our comprehensive package of benefits for Tesco colleagues, which also includes a recently enhanced selection of free food and hygiene products in the Colleague Rooms of our stores, so that colleagues can access a wider range of breakfast, lunch and snack items at no cost.
Notes to editors:
Examples of products covered by our price-lock commitment include:
Product
Current price – locked until 2023
TILDA PURE STEAMED BASMATI RICE, 250G
£0.95
SKI STRAWBERRY MOUSSE, 4X60G
£1.10
MCCAIN HOME CHIPS, 2.25KG
£4.30
ORAL-B PRO-EXPERT PROFESSIONAL PROTECTION TOOTHPASTE, 75ML
£1.99
HEINZ BAKED BEANS SNAP POTS, 4 X200G
£2.49
NESCAFE ORIGINAL 3-IN-1, 6 SACHETS 102G
£0.99
JOHNSON’S BABY COTTON BUDS, 200 PIECES
£0.95
ROBINSONS ORANGE SQUASH, 1L
£1.75
Low Everyday Prices includes over 1,000 products across larger Tesco stores. Excludes Express. Prices locked until 03/01/2023. Look out for the Low Everyday Prices roundel in-store and online.
A Clubcard is required to redeem Clubcard Prices offers included in Tesco’s toy sale.
