Everything is more expensive this year, with 95 per cent of adults in Great Britain reporting an increase in their cost of living in May 2023, says the Office of National Statistics (ONS).
Parliament says that the cost of living has increased sharply across the UK. The annual rate of inflation reached 11.1 per cent in October 2022, which was a 41-year high. It has eased in more recent months, and was down to 8.7 per cent in April and May 2023.
But inflation is only one part of the picture.
Failed harvests across Europe and North Africa––who can forget the tomato shortage earlier this year––has resulted in a tighter supply, which has the effect of raising costs.
Food and non-alcoholic drink prices are driving record-high UK inflation with costs for staples such as bread and cereals fuelling an average price increase of 19.2 per cent in the year to March.
Consumer group Which? also reports that prices for meat, yoghurt and vegetables have doubled. Additionally, the consumer group found that it is actually the “budget” supermarkets where you’ll find the highest prices.
Lidl and Aldi are the most expensive supermarkets to shop at this year. Lidl’s prices rose by 23.5 per cent for the month of May, closely followed by Aldi at 22 per cent.
And more pain has been experienced thanks to the escalating cost of energy with UK households faced with huge bills. All of these factors are enough to make most people assume that empty bank accounts are purely as a result of increased costs, and that’s why your salary doesn’t go as far as it once did.
Rise of lifestyle creep
But a lack of available cash can be due to another factor, and it is one most people simply don’t consider.
Lifestyle creep, or lifestyle inflation, is a phenomenon whereby the more you have, the more you spend on your standard of living. So where once you may have shopped in high street chain stores, now you gravitate to expensive retailers and fancy designer labels.
The rise of the luxury market is fueling this further. According to experts, the global luxury market consumer base will expand to 500 million people by 2030, with this rise being strongly fuelled by younger Millennial and Gen Z consumers.
With 5 per cent of UK workers earning a 100k salary, it would be easy to assume that splashing the cash on a bigger car, a larger house or more lavish holidays would be well within reach.
Instead, when workers earn more money, the things that were formerly out of their grasp now become necessities, and their cost of living increases in proportion.
Where you live can exacerbate the problem. According to figures from Loughborough University, a decent standard of living in London costs up to 58 per cent more when compared to the rest of the UK.
So what can workers do? Being aware of how your standard of living has changed is a great first step in looking at ways in which you can cut back on expenses.
But if you simply can’t find a way to trim your costs, one great way to boost your pay packet is to move jobs.
A study from Forbes discovered that workers who stay in a company longer than two years get paid 50 per cent less. Job-hopping pays off, and the ONS confirms it. Its data shows that workers who change jobs within a year of beginning a role have higher hourly wage growth.
So, if your company’s cost of living raise just isn’t cutting it, then a new job could be on the horizon. The London Economic Job Board is the perfect place to start your search. It features thousands of jobs in companies that are actively hiring, like the three below.
Product Manager – Savings, Metro Bank PLC, London
As the Product Manager for Savings you will support the definition and delivery of product strategy and new/refined propositions, owning ongoing product management for a defined suite of accounts as well as taking the lead on specific deposits projects. You will also support and deliver key risk, conduct, regulatory and customer experience management initiatives. Interested? Apply here.
Finance Manager, Amazon Digital UK Limited, London
Based in London, Amazon has an opening for a Finance Manager to support the international operational accounting activities of Prime Video. Supporting all aspects of the accounting and reporting process, you’ll also understand internal control design concepts to assess the effectiveness of controls, and design new effective processes and controls for emerging and growing business activities. Find the requirements here.
Fund Finance Manager, HSBC, London
HSBC is seeking a professional to join its team in the role of Fund Finance Manager. Here, you will take full responsibility for controlling and managing the financial accounting and reporting across a range of real assets funds and segregated mandates including investments in real estate, infrastructure funds, joint ventures and direct properties. Get the full job description now.
Explore The London Economic Job Board to find your next role