living costs

The rising cost of living, loans and borrowing

by Madaline Dunn

Research shows that as the cost of living continues to rise, so too is borrowing – whether that’s via credit cards, or payday loans. While it can be tempting to opt for a loan in financially trying times, it’s important to keep your wits about you, and not rush into a decision without thoroughly researching.

At The Salary Calculator, we know how challenging it can be navigating the world of borrowing and loans, so below, we’ve outlined some top tips to bear in mind to keep yourself safe. This article will explore:

  • Why the cost of living is getting more expensive
  • How more people are borrowing than ever
  • How to protect yourself when borrowing

How is the cost of living getting more expensive?

The cost of living has reached crisis levels, leaving many in UK faced with their worst financial situation in decades. Fuel, housing, and food are all getting more expensive. According to the ONS, in February, Inflation hit a new 30-year high of 6.2%, and housing costs and services increased by 7.2% within the last year, too. Moreover, rental prices went up 2.3% and homeowners saw a hike of 2.5%.

Within the same time frame, transport costs have seen an increase of 11.5%, with petrol and diesel prices rising and even hitting record levels in February. Meanwhile, food and drink prices have soared by 5.1% – according to statistics, prices for bottled water, soft drinks, juices, meat, sugar, jam, syrups, chocolate and sweets increased the most.

Looking ahead, as the Russia-Ukraine war continues, with Russia and Ukraine being responsible for 30% of global wheat exports, food prices are only set to rise further.

It’s not just food, fuel and housing that’s seen a hike, either. Clothing and footwear have taken a hit, too, rising by 8.9%. Likewise, furniture, household equipment and maintenance saw a similar increase, rising by 9.2% in the past year.

Alongside the price rises, wages across the UK are now falling at their fastest rate since 2014. This is, again, because inflation is spiralling out of control.

More people borrowing than ever before

People across the UK are feeling the pinch as prices continue to soar and are turning to borrowing to help them cope with increasing financial hardship. According to figures published by the Bank of England (BoE), people borrowed a net £1.5 billion on credit cards in February, which is reportedly the highest since records began. This is even up from 2020, which saw nearly 9 million of the UK’s poorest significantly increase their borrowing amounts.

Joanna Elson, the chief executive of the Money Advice Trust, which runs the National Debtline and Business Debtline, said these borrowing statistics are “an indicator of the underlying challenges households face in meeting the growing cost of living” as she called on the chancellor to provide more targeted help for hard-pressed households.” Adding: “Our concern is that more people will be pushed to credit to cover rising bills, which could be storing up problems further down the line when repayments are due.”

Of course, credit card borrowing is not the only kind of borrowing, payday loans are lurking out there, too and according to reports, interest in these kinds of loans has been ballooning in recent months as living costs surge. Research from Raisin UK has found that in the last 12 months, internet searches for these kinds of loans shot up by 350%.

Experts, however, warn that payday loans, while sometimes attractive, are an easy route into a slippery path of debt. Kevin Mountford, Co-founder of Raisin UK, outlined: “It is easy to fall into a cycle of debt with these schemes if you continually require them to cover shortfalls. With rising interest rates, payday loans will most likely leave you struggling financially, even more as you will owe these companies a continually growing amount of money.”

Adverts for this kind of predatory loan are on the rise and appearing on Google, too. A recent report found that those who searched terms like “quick money now” and “need money help”​ were directed by Google to sites offering high-interest loans to those in financial difficulty. One site advertised when individuals searched for the above terms was Tendo Loan, which offered “Cash in 10 minutes guaranteed. 3-36 months. No credit check!” The site went on to say that those looking to find a loan could have it “delivered faster than pizza!”

How to protect yourself when borrowing

It’s undeniable that millions of people in the UK are facing increasing financial hardship, and predictions are that it is only going to get worse. By 2023, it’s said that as many as 16 million people could be officially classed as living in poverty. So, it’s understandable that some may be faced with no other option than to borrow. That said, when borrowing, regardless of who you’re borrowing from, it’s important you safeguard yourself. Below, we’ve highlighted some top tips.

Research, research, research

When financially desperate, it’s easy to get caught up in signing a loan that you know little about. So, it’s important to make sure you research. Research into the company, make sure that they’re reputable and trustworthy, and get all the facts about the loan, including and especially the small print.

Don’t get conned into borrowing more than you asked for

Lenders may try and talk you into borrowing more than you were looking for or encourage you to opt for a different kind of loan. Make sure whatever decision you make is informed, and not pressured. Take your time, and stick to your guns.

Don’t overcommit, and make sure you can pay back whatever you borrow

Make sure you review your finances before committing yourself to a loan. Entering an agreement with high-interest rates may lead you down a debt hole that’s hard to get out of, and leave you in a worse position than when you started.

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Tuesday, April 5th, 2022 Economy No Comments

None of the content on this website, including blog posts, comments, or responses to user comments, is offered as financial advice. Figures used are for illustrative purposes only.

The National Insurance hike: What, How and Why

by Madaline Dunn

In another financial blow to many, the government has announced that the National Insurance (NI) hike will, in fact, go ahead. This comes at the same time as energy bills skyrocket, food costs rise, and interest increases, leaving many concerned about what it will mean for them and the general cost of living. 

At The Salary Calculator, we’ll help you get to grips with the upcoming changes and explain:

  • What the National Insurance hike is all about 
  • How much more money you can expect to pay
  • Who will be affected most by the hike

The National Insurance hike 

On 28 January, Chris Philip, Minister for Technology and the Digital Economy, announced that the planned National Insurance increase would indeed go ahead in April, much to the dismay of millions in the UK. 

This move goes against the Conservative Party’s 2019 election manifesto, and according to the government, is expected to raise £36 billion over a three year period. The hike is reportedly in response to Covid and the pressure it placed on the NHS. A portion will also be dedicated to reforming the social care system.

Defending the hike, in The Sunday Times, Prime Minister Boris Johnson and Chancellor Rishi Sunak called the policy “progressive,” adding: “We must clear the Covid backlogs, with our plan for health and social care – and now is the time to stick to that plan. We must go ahead with the health and care levy. It is the right plan.”

How much money you can expect to pay

The changes to National Insurance will come into effect on 6 April 2022 and according to reports for many across the country this hike is the equivalent of a 10% increase in deductions from pay packets. The rate of dividend tax will also increase by 1.25 percentage points. 

Those earning £9,880 a year, or £823 a month, won’t have to pay National Insurance, but those earning £12,875  or more will see their NIC increase. For example, basic-rate taxpayers will see their NIC jump from 12% to 13.25%. So, those earning £24,100, will say goodbye to an additional £180 a year which translates to £3.46 a week, or £13.84 a month. Meanwhile, those on £50,000 will pay £505 more a year. 

Those who are higher-rate taxpayers and on a salary of £67,100 will pay £715. While those on £100,000, will pay £1,130 more.

Who will be affected the most by the hike?

Although the tax will be progressive, with those who earn more paying more, those on £100,000 a year will pay just 7% of their overall salary in NIC, which is the same proportion as those on just £20,000 a year. Moreover, the NI hike means that someone on £50,000 a year will pay £5,086, around 10% of their gross salary.

With so many families already struggling to make ends meet, many argue that the NI increase should be postponed. Commenting on this, Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “Now is not the time for a tax hike: the National Insurance rise in April needs to be shelved.”

This is something echoed by Laura Suter, head of personal finance at investment platform AJ Bell, who said poorer families will be hit the hardest: “For a much bigger proportion of low-income families, monthly costs go on things like energy bills and food bills, who tend not to have the same ability to cut back as wealthier families.”

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Tuesday, February 15th, 2022 Economy No Comments

Energy prices on the rise

by Madaline Dunn

News of rising energy prices will come as another financial knock to many people across the UK after what has been a turbulent two years. The cost of living is set to increase once again following a worldwide squeeze on gas and energy supplies.

In October, around 15 million homes saw their bills up 12%. Unfortunately, the situation is only likely to worsen, with industry leaders calling for government intervention to help tackle the “national crisis”.

At The Salary Calculator, we’ll walk you through:

  • How much you can expect costs to rise by
  • The causes of the price hike
  • Whether there’s anything you can do to navigate this

How much will costs rise?

In the UK, the trade body Energy UK has released some bleak forecasts regarding energy bills, outlining that they could rise by 50% by springtime, which will ultimately hit low-income households and small businesses the hardest.

As a result, reports say that the energy bill for the average household could increase by £600 by April – and looking forward, next year, bills could reach £2,200-a-year on average.

Of course, with other rising living costs, this is concerning news for many. Alex Belsham-Harris, of Citizens Advice, says that already people are feeling the pinch. He added: “With major hikes to energy bills from April and other costs of living rising, the quickest and easiest way for the government to provide direct support for those hardest hit will be through the benefits system.”

What’s causing the hike?

Energy costs are on the rise for a number of reasons. Wholesale energy prices have surged as economies emerge from the pandemic, with demand increasing and fewer exports. Last year’s cold winter in Europe also played a part. So, there has been a range of technical and geopolitical issues at play. Since 2020, energy prices have risen by 250%, and in August, they rose further by a staggering 70%. This has led to more than 20 domestic suppliers going bust as the price cap prevented companies from charging consumers more to deal with this.

Although Ofgem’s price cap has limited energy suppliers in regards to how much they charge, this is to move in April and could reach £1,995-a-year per household.

What can you do?

It can be stressful thinking about the prospect of rising energy prices, and it’s understandable to have concerns and questions.

Some important information to remember is that if you’re struggling to keep up with payments, don’t put your head in the sand. Reach out to your supplier as soon as possible. Suppliers can help set up an affordable payment plan if you feel things are spiralling – they may even pass on the details of charities that can help you with your financial burden.

That said, if you feel as though the situation has advanced beyond that, it may be time to reach out to a debt adviser to help you navigate missed payments and the like.

Likewise, it’s worth noting that if your provider is one of the unlucky ones caught up in the crisis and goes bust, and you have credit on your account, it won’t be lost. Instead, your balance will be transferred to your new energy supplier – the same goes for any debt on your account; it will be passed on.

Of course, there are ways you can use energy more efficiently, too, to keep your bills lower. Simple things like not leaving appliances on standby and switching off lights when they’re not needed can have a big impact. Switching to low energy light bulbs can keep costs lower, too, as can using draft excluders and investing in better insulation and double glazing – although the latter may not be financially viable options for everyone.

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Wednesday, January 26th, 2022 Economy No Comments

The UK bills comparison

by Madaline Dunn

When analysing how expensive it might be to live somewhere, people often overlook factoring in council tax and bills, which can be pretty big extra expenses after rent.

Some locations will even see you forking out as much as £2,078 a year when it comes to council tax. Meanwhile, across the UK, annual utility bills can reach as high as £2,416. So, the cost of running a home can really add up!

So, just how expensive can expenses get, and where can you move to avoid these prices? At The Salary Calculator, we’ll walk you through:

  • What council tax is and why it fluctuates
  • Which locations are the cheapest and most expensive for council tax
  • Where you can find the lowest utility bills
  • Where the most expensive utility bills are located

What is council tax, and why does it fluctuate?

Council tax is paid to your local council and is typically split into ten monthly payments. It goes towards everything from rubbish collection and transport to education services and leisure projects. How much you pay in council tax depends on where you live and the value of your home.

Interestingly, house prices don’t always correlate with council tax though. For example, although Westminster is home to some pretty pricey properties, it also has some of the lowest council tax rates in the UK. This is because these locations’ councils generate large amounts of revenue from alternative sources, such as through business rates and parking fees.

Of course, the locations with lower council tax rates also have fewer outgoings when it comes to expenses. This will largely be informed by the demographic of the area.

Raj Dosanjh, the founder of, commented: “There are multiple facets to how councils formulate how much Council Tax to charge residents, circling around other revenue incomes for the council. Westminster, for example, has an abundance of income from business rates.”

Adding: “Due to the busy high streets in the area, Westminster generated £2billion in business rates in 2019, 25 percent of London’s £8 billion total.”

There could be change on the horizon, though, with the Progressive Policy Think Tank making the case to scrap both council tax and stamp duty, replacing it with a “tax proportional to the value of the property itself.”

This reform, it says, would help to create a “fairer and more progressive” system and address “regional inequality, wealth inequality, and would ultimately build a stronger economy across the UK.”

Where are the cheapest and most expensive locations for council tax?

Council tax rates vary widely across the UK, and there’s a huge difference between living in Blaenau Gwent or Wandsworth.

The UK’s cheapest council tax can be found in:

  • Westminster: £828
  • Wandsworth: £845
  • Windsor & Maidenhead: £1,149
  • Na h-Eileanan Siar: £1,149
  • Hammersmith & Fulham: £1,196

In contrast, the most expensive council tax is located largely in Welsh boroughs. These include:

  • Blaenau Gwent: £2,078
  • Kingston-upon-Thames: £2,057
  • Merthyr Tydfil: £2,018
  • Neath Port Talbot: £1,996
  • Harrow: £1,962

Where can you find the cheapest utility bills?

By region, the lowest utility bills can be found:

  • Greater London: £775
  • South East England: £856
  • East of England: £873
  • North East: £904

The places with the cheapest average annual spend on utilities (including lighting, heating and hot water) per household include:

  • London: £775
  • Dartford: £782
  • Milton Keynes: £784
  • Manchester: £787
  • Rochester: £808

Where are the most expensive utility bills located?

Across the UK, the regions with the most expensive utility bills are:

  • Midlands East: £914
  • South West England: £919
  • North West: £948
  • West Midlands: £949
  • Yorkshire and the Humber: £978

The places with the most expensive average annual spend on utilities (including lighting, heating and hot water) per household include:

  • Dumfries and Galloway: £2416
  • Llandrindod Wells: £1311
  • Galashiels: £1181
  • Shrewsbury: £1157
  • Carlisle: £1140

Unfortunately, recent reports have revealed that energy bills are only on the up, too! By 1 October, the regulator, Ofgem’s price cap is set to increase by 12% to £1,277 a year for average use. If expert predictions are correct, this will surge to between £1,440 and £1,500 by spring 2022.

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Monday, September 27th, 2021 Economy No Comments

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