Shocking figures last week suggested that people in the UK have seen debts double over the pandemic. Add to that news that energy costs could potentially double in a year, and that the inflation of day to day living is vastly underplayed by official figures, and it is fair to say that many people are feeling anxious regarding their finances.
Our very own founder Jasmine Birtles has been trying to support the British public for many years through her financial advice in times of need. Currently, along with the team at GB News, she is campaigning to reduce the VAT on our energy bills.
However, she feels people need to hear from the experts now more than ever, so we spoke with Jasmine and posed many of the questions we have received over social media over the last few weeks, hoping to explain some of what is going on.
- Would you say the UK is at a crisis point?
- Is this an international pattern?
- Do you think the figures are accurate?
- Which sectors are hardest hit?
- Have wages increased?
- Has lending increased?
- Do you see increases continuing?
- Can MoneyMagpie help?
Regarding living costs, yes. I think many people are although others are still managing. However, costs are likely to continue to go up, particularly energy costs which may double for quite a lot of Brits in the next few months.
Up to a point, yes. We have a particularly bad problem with energy costs in this country as we don’t produce enough of our own. We really need to get to the point where we are much more independent when it comes to our energy production.
However, rising prices are very much an international problem. Inflation is over 7% in the USA. We have seen insane amounts of quantitative easing (money-printing) going on across the West in the last couple of years which is underpinning the current inflationary situation.
No, I think inflation is closer to 10% in reality. I think the 5.4% figure – though high – is not realistic for most people in the UK. Just taking energy costs alone, the amount they have to pay each month is going up very fast, and anyone who has examined their supermarket bill in the last few months will know that prices are rising higher than we are being told.
Energy, petrol, food, clothing, second hand cars are all going up fast. I think that most will continue to go up over the next few months. I don’t see this easing off in April as the Bank of England has forecast. As I have been saying for the last year, I think it will go on for longer than that.
Yes but not enough. They need to go up by more than most employers can afford in order properly to keep up with inflation.
At the moment it’s still very cheap to borrow if your credit rating is good enough so lending is pretty robust right now. One charity that I am patron of – Fair For You – lends to people on low incomes in order for them to buy products for the home, and I know they are rushed off their feet. The real problem will come when the Bank of England finally raises interest rates by a significant degree. At some point they will have to but I think they will put it off for as long as they can.
Yes. Although wages are going up in some professions they’re not in others. Many employers are concerned about the future as they know that inflation means people’s discretionary spend will be down and that that could hurt their sales figures. They are holding back from increasing wages or spending on advertising, for example, before they see what is going to happen.
Yes definitely. We have literally hundreds of articles on how to save money, how to make money and how to manage your money in a crisis. We are also running free webinars and sending out podcasts and videos to help people cope day-to-day. What we can particularly offer to our readers is help with making extra cash on the side which is going to be more and more necessary for everyone going forward.
Although some of this may sound alarming as Jasmine has specified, there is help out there for those in need and she suggests that although “the government is talking about helping people with energy bills, it will probably come too late and be too little. It usually is. I would like to see them remove the 25% green tax and, in the short-term, the 5% VAT on energy bills.”
Jasmine says it is crucial that people remember that there are people aside from the government who will be able to help. She suggests that “people who are already struggling should go immediately to one of the free debt advice charities such as Community Money Advice, StepChange, Citizen’s Advice and Christians Against Poverty. I also recommend that they go to Turn2Us.org.uk to use their benefits calculator and also see if there are any grants that they may be entitled to.”
Most importantly, Jasmine’s advice is not to panic, as “it’s likely that this year and possibly next year will see high inflation, but it will go down again at some point. So don’t think this is forever. Now is a good time to get together with friends and family and see what you can share…including sharing where you live if necessary, as it’s cheaper to heat one home than two! Also look into ways that you can make extra cash on the side to help pay bills and keep you going. We have loads of ideas on MoneyMagpie.com!”