How will the 2022 cost of living crisis impact you?
The cost of living is set to increase during 2022 posing a real threat to many families, making it more difficult for low-income households to make rent payments. The year ahead is already paved with increases to household bills, travels cost and taxes. Many families renting homes in the private sector will likely face difficulties as a result of the rise in living costs, with the added squeeze of landlords pushing up rent to cover their increasing costs and interest rates. All of this occurs at the same time many families in the UK are experiencing the effects of rising inflation, with the bank of England forecasting an inflation peak of 6% in early 2022.
Rising inflation, tax increases, and soaring energy bills have been cited by experts as the key factors driving up the cost of living in 2022 – with predictions that the average household in the UK will be £1,200 worse off in the coming months.
Here are some of the areas that could contribute to the rising cost of living in 2022.
Rent Increases
After a year of highs and lows, and lingering affordability problems from the pandemic, 2022 is set to bring new challenges to the rental market. It is forecast that house prices and mortgage rates will keep rising in the year ahead, fuelling a competitive market for house sales and the rental market. Over the past eighteen months, Citizens Advice Cardiff & Vale have provided sound advice for many in the rented sector. With further concern now that evictions are once again possible for landlords, with renters unable to pay back missed rent.
If these renters are evicted or their landlords decide to sell, renters who are already struggling financially face a competitive rental market with potentially higher rent prices.
According to a report outlining the escalating cost of living crisis affecting the UK’s lowest-income families, nearly 4 million households are behind on rent, bills, or debt payments. Here at Citizens Advice Cardiff & Vale we provide free, confidential and impartial information and advice to the residents of Wales
Energy Bills
Energy prices climbed throughout 2021, increasing home energy expenditures and contributing to the cost of living crisis. The increase of energy prices through the demand for oil and gas is also fuelling inflation. Many households have been protected from some of the increases by an energy price cap, which requires suppliers to offer gas and electricity at or below a unit price established by the regulator. The cap is set to be reviewed in February 2022 and implemented in April 2022, and recent gas prices have led to speculation that household bills could become out of reach for people on a limited income.
Inflation
With inflation set to soar to 6% by the spring of 2022, price increases are very real. You may not notice low levels of inflation from month to month, but over time these price rises have a big impact on how much people can buy with their money.
Tax Rises
From April this year, a 1.25% health and social care levy will be added to employees’ National Insurance contributions. The additional £12bn expected to be raised each year will initially go towards easing pressure on the NHS and then be pumped into the social care system.
Travel Costs
Fuel prices soared by more than 30p per litre last year, with the UK petrol price passing £1.40, the highest in almost a decade. This March, rail fares are also set to rise by 3.8%, yet another price rise as many families face a cost of living crisis.
What Should You Do?
Don’t lose all hope – there are so many things you can do to stay on top of rising costs. Budgeting is your first step, understanding your costs and what you are left with to spend is very important. For help in working out your budget, or for further information on help with bills. Click Here
On 1st April we will see an increase in energy prices, taxes will also go up, National insurance will rise, as will council tax across much of the country. If this gives you any cause for concern, we encourage you to speak to us early so we can provide assistance before it is too late. https://cacv.org.uk/contact/
I’m already in Arrears, what can I do?
Getting into rent arrears can be distressing, but it is so important that you address any concerns early. If you don’t take action to pay back what you owe, you could end up losing your home. If you have any difficulties in paying your rent, please click here for further help and advice
to find out what you can do to stop yourself from being evicted for rent arrears. Click here https://cacv.org.uk/our-projects/private-rented-sector-helpline/
You’re not the only one
1 in 7 fall behind on household bills, according to a report outlining the escalating cost of living crisis affecting the UK’s lowest-income families. Nearly 4 million households are behind on rent, bills, or debt payments. Here at Citizens Advice Cardiff & Vale we provide free, confidential, and impartial information and advice to the residents of Wales.
For free help and advice, please Contact Us here.
This section is in
