By Barnes Gladman, Financial Planner with Anstee & Co.
With inflation around a 40-year high and the Bank of England forecasting that it could peak at 11%. All this against a backdrop of the government’s target for inflation of just 2%.
Whilst people try to tackle these issues by spending less on essentials (66%), using less energy at home (60%) or working more hours (15%), households are increasingly turning to consumer credit to make ends meet. This combined with interest rate rises creates an unavoidable “double whammy” as those with the highest level of debt become most exposed to further price increases.
Why is it happening?
Whilst the conflict between Russia and Ukraine is the primary driver behind the cost of living crisis, many other variables have contributed to the storm afflicting UK households in 2022.
- Covid: the effects of the pandemic cannot be underestimated. On top of the health impact, it has brought social and economic upheaval, from the multi-billion pound cost of furlough to the dismantling of the transport, travel, hospitality, entertainment and leisure industries.
- Economic resurgence: manufacturing and distribution sectors kicked back into life as Covid receded, triggering a further surge in demand for energy and more upwards pressure on prices
- Regulation: more than 30 UK energy suppliers have gone bust since the start of last year with the cost of managing their customers shunted onto household bills.
- Environmental concerns: The increased focus on green energy has seen a movement towards renewable sources of energy to produce electricity, such as wind and solar, with older coal-fired power stations being closed as a result. However, renewables are not yet able to provide sufficient power resulting in a continued reliance on gas, which remains incredibly expensive.
- Supply chains: Drivers and Fuel have both been in short supply, and when the cost of distribution increases, so too does the cost of goods on the shelves.
- Commodity prices: the price of raw materials has risen due to escalating transport and distribution costs, combined with the fact Ukraine and Russia produce significant proportions of the world’s wheat supply, along with staples such as vegetable oil. The longer the war goes on, the greater the effects will be felt around the world.
Independent Financial Advice can help.
In times like these, Independent Financial Advice becomes more important than ever. With prices soaring and interest rates rising, are your savings working hard enough for you? Are they invested in the right place to ensure they maintain their value in real terms?
As the government U-turns on the mini-budget, now is the time to ensure you have a financial plan in place. Cashflow Forecasting can assist hugely in building confidence in your future, whether you are in drawdown, saving for the long term or purely trying to budget your way through the current economic climate.
How Anstee & Co can help you with the cost of living.
If you are considering your financial options but are unsure about how they may impact your financial future, we can help. We at Anstee & Co. are Independent Financial Advisers which means that the financial advice we offer is unbiased.
The initial meeting is at our cost, so why not contact us today? A meeting can be arranged at your home or our Head Office located at-
- Kettering, Northamptonshire
Additionally, our financial planners live and make use of meeting rooms in-
- Market Harborough, Leicestershire
- Bedford, Bedfordshire
- Towcester, Northampton, Wellingborough, Corby and Thrapston in Northamptonshire.
- Stamford, Lincolnshire
- Central London
We make full use of video conferencing facilities such as-
- Zoom
- Microsoft Teams
- Skype
- Facetime
We can also arrange a conference telephone call. So, there is no need to visit an office as all work can be handled remotely. The choice is yours. Our expertise covers all aspects of financial planning including pensions, investments and mortgages.
If you have any thoughts on this article, “Cost of living, Inflation and Financial Advice”, then we would love to hear from you.
Finally, the information contained in this article is for information purposes only and does not constitute financial advice. Anstee & Co. is authorised and regulated by the Financial Conduct Authority (FCA).