The cost of living in the UK is notoriously high. In fact, it is often cited as one of the most expensive countries in the world to live in. So, what exactly makes the living costs so high in the UK? And more importantly, what can be done about it?
In this article, we will take a closer look at some of the reasons for the rising prices in the UK and why the cost of living is going out of hand.
The cost of living is high in the UK for a variety of reasons:
1. Housing Costs
Housing is one of the biggest expenses for British residents. The cost of buying a home in the UK has been rising steadily for years, and there is no end in sight. According to the report of Office of National Statistics, the average price of a house in the UK was £286,000, which is £20,000 more than same time in 2021. This is an unattainable sum for many people, especially young people who are just starting out.
Below given is a table showing how much the housing cost has increased from 2021 to 2022.
| Country | 2021 | 2022 | Percentage Increase |
| England | £286,496.4 | £314,000 | 9.6% |
| Wales | £198,405.7 | £224,000 | 12.9% |
| Scotland | £178,937.6 | £192,000 | 7.3% |
| Northern Ireland | £158,988.3 | £176,000 | 10.7% |
Renting is also very expensive in the UK, with the average rent for a one-bedroom flat in London now exceeding £2000 per month.
This high cost of housing is having a devastating effect on British residents, particularly those who are struggling to get by on low incomes.
2. Transportation Costs
Due to the high price of gas and the limited availability of public transportation, many people in the UK are forced to rely on their own vehicles to get around. This is a very costly way to travel, especially for families with multiple cars.
This means that they must pay for gas, parking, and car maintenance. All these costs can add up, making it difficult to afford other basic necessities like food and housing. In addition to this, UK has a lot of toll roads, which can also add to the cost of living.
3. Food Prices
Food prices are relatively high in the UK compared to other countries and the main reason for this high cost is the rising price of groceries.
The average weekly food bill for a family of four in the UK is now over £108 and the average monthly food bill for a family of four is £708.
The increase in food prices can be due to a number of factors, like the weakened pound, bad weather affecting crop yields, etc. As a result, families are spending more of their income on food, leaving less money for other essential items such as housing and clothing.
One potential solution to the high cost of food is to encourage people to grow their own food. This would help to reduce the amount of money that families need to spend on groceries, and it would also provide them with healthy food.
Also Read About: How To Save Money When Shopping For Food
4. Taxes and Other Government Fees
Taxes and other government fees are also high in the UK. The government charges fees for taxes which includes, income tax, council tax, and VAT. In addition, the government charges for a variety of services, including healthcare, education, and transportation. These taxes can add up, making it difficult for people to afford other essential items like food, house, travel, clothing, etc.
In addition to taxes, there are also several other government fees that residents of UK must pay. These include car registration fees, passport fees, etc. All of these costs can add up, making it difficult for people on low incomes to make ends meet.
5. Gas and Electricity Bills
Energy crisis which leads to increase in energy prices has been one of the main reasons for high cost of living in the UK. The average electricity bill rose to £700 as compared to last year. The average oil and gas prices gas has also increased a lot within a year. The average petrol prices in UK increased to 191.53p per litre in July 2022.
With a record increase in household energy bills in last 30 years, families are spending more of their income on gas and electricity bills, leaving less money for other essential items like food and clothing.
One potential solution to this problem of rising energy costs and gas prices is to invest in renewable energy sources such as solar power and wind power. This would help to reduce the amount of money that families need to spend on their energy bills, and it would also help to protect the environment.
How More Worse Will It Get?
As per August 2022, the Consumer Prices Indexis as high as 9.9% which is the highest in past 20 years. The main reason for this rising inflation and rising costs creating living crisis in the UK is Brexit and also the global pandemic, which has resulted in an increase in the cost of living.
Also, due to Russia’s invasion of Ukraine, economic forecasters have increased their consumer price inflation and rising cost expectations not just in the near term but also for an extended period.
What Can Be Done to Tackle This Increase in Consumer Price Index?
The Bank of England’s traditional response to rising inflation is to raise interest rates. This makes it more expensive for people to borrow money, which can help to slow down the economy and reduce inflation.
However, raising interest rates is not always effective, and it can sometimes have the opposite effect. For example, if interest rates are raised too high, it can cause a recession.
There are a number of potential solutions to the high cost of living in the UK. These include:
- Encouraging people to grow their own food.
- Encouraging people to save more money and don’t spend on things they don’t need.
- Investing in renewable energy sources such as solar power and wind power.
Final Words
The high cost of living is a major problem for families in the UK, which is why, it is important to find ways to reduce the cost of living so that families can afford to live comfortably. Hopefully, with some effort, the cost of living in the UK can be reduced so that everyone can enjoy a better standard of living. Only time will tell how this situation will play out.
Thanks for reading!
Disclaimer: We are not providing financial advice; this content is for informational purposes only.
Also Checkout:
How To Save £20000 in a Year in UK
