Here’s How Families Can Beat the Rise in Inflation, Which Hit a 40-Year High
Inflation has hit a 40-year high of 9.1%, tightening its grip on the strongest level in generations given the pressure on families.
The hike comes amid the record cost of petrol and rising food prices.
Data from the Office for National Statistics showed an increase in May from 9% in April, as measured by the Consumer Price Index.
At a new high, headline inflation rates at a level not seen since February 1982, increasing pressure on families amid a cost of living crisis.
However, there may be some simple ways that people can reduce the pressure on their finances.
Here are some easy ways families can cope with a subsistence crisis.
make a budget
One of the best ways to beat inflation is to create a budget to help with your spending and see where you can cut back.
Sarah Coles, Personal Finance Analyst at Hargreaves Lansdowne, said: “With inflation going so high, we need to be careful that rising prices do not prompt us to spend more.
“By far the best way to start is to prepare a budget and work out the most sensible places to cut.
“It can be as simple as shopping around for the better deal on everything from media packages to groceries and insurance.
“However, if you’ve already taken easy steps, it can mean eliminating some of the luxuries you don’t really value.
Check Direct Debit and Unnecessary Charges
Another trick is to check your direct debit. Coles said: “Checking out the hidden things in your regular direct debit is a good place to start.
“It’s only when it doesn’t do the trick that you need to consider more difficult lifestyle changes to keep costs down.”
It is also worth checking other unnecessary charges such as credit card charges.
Review Savings Accounts
Rachel Springall, a finance expert at Moneyfacts.co.uk, said: “As interest rates and inflation were particularly volatile in 2021, it is understandable that many savers feel uneasy about a longer fixed period.
“Instead, savers would be wise to make sure they’re getting the best possible return on their cash savings account that best suits their needs, and switch if they’re getting a bad deal.”
stock market investment
For those with more spare cash, another thing to consider is investing in the stock market.
Coles suggested that while people may want to keep emergency savings in a vessel they can easily access, those with more cash should consider longer periods.
She said: “For money you don’t need five to 10 years or more, you can consider investing in the stock market.
“The value of your investments will rise and fall in the short term, but in the long term you should be able to eliminate it and your investments offer a better chance of staving off inflation than savings accounts.”
Get support through Citizens Advice or other channels
Rising inflation rates hit people in different ways, but can be especially difficult for the elderly, who depend on their pensions.
Kate Smith, senior benefits specialist at Citizen Advice, said: “If you’re going through a tough time, one of the most important things to do is to make sure you’re getting all the support you deserve.
“And remember that if you’re struggling this January, Citizens Advice can help you become who you are and whatever problems you have.”
Becky O’Connor, head of pensions and savings at Interactive Investor, said: “A large proportion of low-income households are pensioners. Age UK The UK has estimated that more than two million pensioners are living in poverty in the UK.
She continued: “The imbalance between state pension hikes and inflation rates, which is likely to increase further till April, will provoke further calls for a hike. government To consider a more generous uplift that accurately reflects the hardship that many older people now face.
“We saw from other ONS (Office for National Statistics) data published this week that the number of older people working during the pandemic has dropped significantly. Finding work when you’re in your 60s is no easy task – this group survives on their pension alone, which is precarious in times of rising inflation.”
Ms O’Connor said: “This is really important for older people who are struggling to see if there are any benefits they are eligible for that they are not currently claiming, such as pension credits. and any other relaxation targeted at their age group.
“Those who have private pension pots can consider allocating a higher proportion in equities with the potential to beat inflation.
“Older people who have started to draw from their pension but are still working and able to contribute will still benefit from tax relief on contributions up to £4,000 per year.”
Credit: www.standard.co.uk /