interactive investor comments on an ONS study on worries about the rising costs of living.
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “The study lays bare the effects the escalating cost of living crisis is having on mental health, as well as finances. The overwhelming majority of the sample reported feeling unsettled by the rising cost of living over a period where energy bills soared to almost £700 a year, on average, while the cost to put food on the table and fuel a car also rose significantly.
“The cost of living crunch is indiscriminate, but it has impacted people differently. All of us are noticing our bills go up, but it is felt more acutely by those on low incomes.
“The study also shows that women are more worried about rising prices than men, which could be symptomatic of the gender wage gap, while those aged 30 to 49 years 50 to 69 years were the age groups most likely to report feeling very or somewhat worried about inflation.
“Parents of young children are more worried about rising prices than a those without a dependent child. They have to contend with an additional burden of a rising childcare bill, with nursery fees, snacks and even nappies also on the up.
“The cost of living crisis is set to get worse before it gets better, with energy bills set to go up by £800 a year on average come autumn and the devastating war in Ukraine adding to inflationary pressures here in the UK. Post-Covid supply bottlenecks also remain a factor.
“Amid these inflationary challenges, it is critical that we consider what protective steps we can take now to avoid money worries later on. A separate study published by the Bank of England shows that people often underestimate the extent of the cost-of-living crisis. When asked to give the current rate of inflation, respondents gave a median answer of 6.1% when it was in fact 7% at the time the survey was conducted.
“Keeping on top of your financial well-being may translate to doing an emergency budget, cutting down on non-essential spending and squirrelling away more money into a rainy-day fund if you can afford to do so. Be realistic and make sure your spending plan is achievable.
“Living under the cloud of money woes can leave anyone feeling the strain, and can make it harder to think about your finances and find solutions to money problems you may find yourself in.
“Those struggling to keep on top of their finances needn’t suffer in silence – there is support out there. If you're behind on your bills, contact your creditors to ask for support. It is worth consulting a debt advice charity such as StepChange or Turn2Us and they will go through all of your options.”
- The ONS study published today found around 3 in 4 adults (77%) aged 16 years and above reported feeling very or somewhat worried about the rising cost of living.
- Half the adults (50%) who were very worried felt those worries nearly every day.
- Women were more likely than men to report feeling very or somewhat worried about the rising costs of living: 81%, compared to 73%.
- Those aged 30 to 49 years (82%) and 50 to 69 years (77%) were the age groups most likely to report feeling very or somewhat worried about the rising cost of living, For those aged 70+, 70%, said they were very or somewhat worried.
- Adults living with a dependent child aged 0-4 years old were more likely than adults without a dependent child to be very or somewhat worried about the rising cost of living: 90% compared with 76%.
- Disabled people were more likely than non-disabled people to feel very or somewhat worried about the rising cost of living: 82% compared with 75%.
- Feeling “very worried” about the rising cost of living fell as adults’ personal income increased. Nearly a third (31%) of those with a gross personal income of less than £10,000 per year felt “very worried” compared with 12% of those with a gross personal income of £50,000 or more. Looking at those who said they were ‘very or somewhat worried’, the results were relatively similar for all groups.
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