How to ease the rising cost of living

Why living costs are rising

Living costs are going up because the average price of goods and services is increasing faster than people’s income. This, combined with tax increases and a rise in National Insurance (NI) contributions, has left many households on tighter budgets and struggling to make ends meet.

Inflation has been going up due to a number of factors, including higher global oil and gas prices, coupled with uncertainty over supply chains and staff shortages. When companies face higher operating costs, they often put up their prices, creating a knock-on effect.

How to manage higher living costs

Here are some things you can do to help ease your finances.

Review your finances

Whatever your situation, creating a budget can make it easier to manage your money. It’ll help you see what money you have regularly coming in and going out, and possibly find areas to reduce your spending. 

If you need support reviewing your finances, or you’re finding that rising costs are simply making things unaffordable, we’re here to help.

Check what benefits you can claim

Benefits and other government support can help if you’re out of work or on a low income, but you may be eligible for other types of support too. For example, free childcare, or a Council Tax discount if you live alone. 

If you think you might be missing out on some of these benefits, you can check using this free benefit calculator Opens an overlay [Will show a security message first].

Focus on energy

Millions of households face much higher bills because of an increase in the energy price cap. From washing your clothes at a lower temperature to switching energy suppliers, there are ways you can save money on energy. You can also reduce your energy bill by making your home more energy efficient. For example, by draught-proofing windows and doors and insulating pipes, you can reduce heat loss and save money.

For more information about making your home more energy efficient, visit energy saving trust Opens an overlay [Will show a security message first].

Save money on your food bill

Food shopping is one of the biggest weekly household expenses. From setting a budget to planning your meals and storing your food, there's a range of things you can do to make your money go further at the supermarket.

Save money on fuel

With petrol and diesel reaching record highs, it’s more important than ever to shop around for the best price. You can check local fuel station prices online before filling up, or take advantage of loyalty schemes. There are also ways you can make your car more fuel-efficient, so the fuel you do buy, lasts longer. For example: 

• keep your tyres inflated – your car will use more fuel if the tyre pressure is lower or higher than the recommended amount

• lighten the load –  if you can, avoid driving around with a full tank of fuel or unnecessary luggage
  

• accelerate gradually – the harder you press on the accelerator, the more fuel you’ll use

• change up gear sooner – to avoid having to accelerate as much

Check what you're paying for

Go through your bank statements and look at your standing orders and Direct Debits. You may be able to save by cancelling services you no longer use, such as subscriptions.

Now is also a good time to review existing services, such as home insurance, utility bills, broadband or phone contracts – to make sure you’re getting the best value for money. Always note down when deals come to an end – as you can often negotiate better prices before they auto-renew. 

Pay off debt in a smart way

Paying off debt in a smart way can reduce the amount of interest you pay. For example, if you’re being charged interest on your credit card, a 0% balance transfer credit card could save you money. 

If you have multiple debts, a cost effective option may be to repay the debt with the highest interest rate first, as it’s charging you the most to borrow the money. Keep in mind – you’ll still need to meet at least the minimum repayments on all debts to avoid charges. 

If juggling multiple debts is too stressful, a debt consolidation loan can be a way to simplify your repayments and help you get back on track. However, it’s important to consider whether you’ll repay more on a monthly basis and over the course of the loan.

Where to get support if you need it

You may have tried everything and cut back your spending on all but the bare essentials. But what if it’s not enough? 

If you still can't afford the cost of living, here are some ways you can get help:

Help with food

If you’re struggling to pay for food, your local foodbank Opens an overlay [Will show a security message first] can help, as well as provide other household items like toiletries or cleaning products. In 2020/2021, 2.5 million people used a foodbank in the UK – over 600,000 more than the previous year².

To be eligible, you’ll need a referral from the foodbank directly or one of the following: 

• a GP, health visitor or social worker
• police or probation worker
• children’s centre
• Jobcentre Plus
• Citizens Advice

Help with rent

If you’re struggling to pay your rent, it’s important to tell your landlord or letting agency as soon as possible. If your rent isn’t paid, the money owed is called 'rent arrears'. These are priority debts, which mean you should sort them out first, before tackling other debts – to avoid the risk of eviction.

Create a budget and work out how much you can afford to pay. Contact your landlord or letting agency, tell them you’re taking steps to deal with the situation, and offer to pay what you can at this stage. StepChange have free sample letters Opens an overlay [Will show a security message first]. It’s important you stick to the new payment plan if agreed. If they refuse your offer, or don’t reply – it’s important you make the payments anyway.  

If you’re worried about rent arrears or eviction, Shelter Opens an overlay [Will show a security message first] or Housing Rights Opens an overlay [Will show a security message first] (if you live in Northern Ireland) can help you understand your rights and what to do next. 

Help with your mortgage

If you’re worried you won't be able to make future mortgage payments, or are already in arrears, your mortgage lender should be able to help. 

If you’re a first direct customer, we’re here to provide mortgage payment support. Whatever your situation, we can help you put a plan in place.

Help with your bills

If you’re struggling to pay your bills, or are worried about future payments, it’s best to get help straight away – don’t ignore them. Speak to the companies you owe to let them know. They may be able to change how or when you pay.

Help if you're behind on debt repayments

When debt becomes overwhelming, it can be hard to know where to start. But remember – you can get support. Make a clear list of all your debts and the amount owed on each. The aim is to pay the priority debts first – the ones with the biggest consequences if you don’t pay, such as your mortgage or a court-ordered payment. 

Speak to the companies you owe. They can help you create a repayment plan that’s manageable and will help you avoid missing any future payments.

If you’re a first direct customer and you’ve missed – or are worried about missing – a loan or credit card payment, or you're concerned about your overdraft, we’re here to help.