Cost-of-Living Crisis – What does it mean, how does it affect the Care sector and what can you do to reduce spending?
What is the cost-of-living crisis?
The cost-of-living crisis has become a frequently heard phrase in the news headlines over the last year, but what does it mean?
The cost of living is the amount of money needed to cover basic expenses such as food, taxes, and housing.
In a recent health and wellbeing survey taken by the charity Ben – Support for Life, they found that 1 in 5 people are struggling to meet the rising cost of living, such as energy bills, petrol, and food.
The impact at home for those working in the care sector or with a family member who requires care.
Much has been written about the cost-of-living crisis, but little thought has been given to the impact of those who require care and their family. Understandably soaring costs are a huge cause for concern for many especially when considering the potential impact this will have on the care of their loved ones.
If you are really struggling with the cost of living, what can you do?
The first step you should take when trying to reduce your living costs is to manage your money and set a budget. This will help you to understand your spending habits, monthly income, and overall financial position.
There are many ways to budget, and there are plenty of suggestions for budgeting. A common budgeting tip is the 20/30/50 rule. This involves dividing your monthly after-tax income into three spending categories: 50% for needs, 30% for wants and 20% for savings or paying off debt.
By regularly keeping your expenses balanced across these main spending areas, you can put your money to work more efficiently.
Turn down your thermostat.
Almost half the money spent on energy bills is absorbed by heating and hot water costs. Turning your heating down by just one degree could save up to £80 a year. Aim to keep your thermostat at a lower temperature, around 17 degrees can make all the difference. You could also try to add layers and blankets rather than turning the heating on straight away.
Switch off standby
You can save around £40 a year just by remembering to turn your appliances off standby mode.
Almost all electrical appliances can be turned off at the plug without upsetting their programming. You may want to think about getting a standby saver or smart plug that allows you to turn all your appliances off standby in one go.
Water is one of the biggest costs of living. Using water uses money – especially if you are on a water meter. Doing little things to reduce water usage can, therefore, massively reduce costs. For example:
Do not keep the tap on whilst you are brushing your teeth.
Have shorter showers.
Put on shorter washing cycles
When doing the dishes, fill your sink up with water so that the tap does not keep running.
If you have a water meter, you will only pay for the water you use. Use the Consumer Council for Water calculator to check if having a water meter installed could save you money.
If a water meter does not save you money, you can change it back within 12 months of installation. After 12 months, you cannot go back to unmetered billing.
If you are on a low income, you might be able to get a cheaper rate from your water company. This is called a social tariff.
What can you do if you need help?
You might be entitled to support. To help with the cost-of-living crisis, the government announced several measures:
A £400 energy discount
One-off payments to low-income households, pensioners and those receiving disability benefits
The government will be giving a £650 one-off payment to specified households in the country who are on means-tested benefits. The payment will be split into two instalments: the first payment of £326 and the second payment of £324.
It is important to know if you are entitled to any of these payments.
Who qualifies for a cost of living payment?
This one-off payment of £650 will be available to households in receipt of means-tested benefits, including:
Income-based jobseekers’ allowance
Income-related employment and support allowance
Working tax credit
Child tax credit
To be eligible for the first payment, you must have been in receipt of one of the above benefits on 25 May 2022 or have started a claim from this date.
To receive the cost-of-living payment for tax credits, you must have received a payment of tax credits on any day in the period 26 April 2022 to 25 May 2022.
HMRC urges customers to ensure their information is up to date when renewing their tax credits, as they may be eligible for this automatic payment.
What help is there if money management is starting to cause you anxiety?
If you are struggling with money and your mental health due to the cost-of-living crisis there are resources to help you manage. Mind UK have access to multiple recourses that can help you.
Mental health and money management.
Worries about money can have an impact on your mental health. And those struggling with mental health can find it hard to manage money. Mental health charity Mind have outlined several things that you can do to ensure money management including:
Organising your finances
Dealing with services
Money seems to be a bit of a ‘taboo’ subject and it can feel hard to talk about money problems. But there is plenty of help and support out there. If you’re not sure where to start head to the Mind UK website more information and support for organising finances and looking after your mental health.