Struggling families are being hit by inflation of more than DOUBLE the national rate, an exclusive survey by the Squeeze team reveals.
Official inflation in the UK is 9%, calculated using a basket of goods, but everyone has their own individual rate depending on how they spend their earnings.
The Institute for Fiscal Studies (IFS) has warned that people on the lowest incomes will be hardest hit by inflation, as they spend a large part of their income on energy, the prices of which are rising.
Jodie Denver, 40, a single mother of three who depends on disability benefits to stay afloat, has seen her cost of living rise by 21%.
His plight comes as prices soar at their fastest pace in 40 years, with the national inflation figure rising to 9% in April from 7% in March.
Another rise in gas and electricity bills expected in October will hit cash-strapped people even harder – but our money-saving experts’ survey proves many are struggling with soaring electricity bills. inflation NOW.
Squeeze Team financial expert Jim Lee calculated the personal inflation rate of four households based on their income and expenses.
Compared to income, we looked at how much they spent on everything from vacations and car expenses to financial services fees and furniture.
Jim, a tax partner at James Lee Associates, said: “Our analysis shows that it is the poorest who are hit by inflation.
“I was also struck by the amount of money people spend on fuel.
“And with energy prices expected to rise for many in October, it’s time to consider cutting spending where you can.”
Jodie, from Chigwell, Essex, who suffers from lupus, a serious autoimmune disease, is able to ‘just about’ cover fuel and energy costs but fears for her financial future.
She said: “The cost of living is ruining me. After my fuel and energy costs, I have almost no money left. What’s left goes to food and children.
“My lupus means I can’t work. I have to rely on alms from the local church and I grow vegetables to try to reduce our food costs.
- Vehicle costs: £0
- Petrol/diesel (annual): £4,800
- Food (annual): £600
- Alcohol & tobacco (monthly): £48
- Monthly rent): £625
- Water, gas, electricity (monthly): £370
- Travel (monthly): £400
Jodie relies on her Employment and Support Allowance of £117.60 a week to feed and clothe her children Natalie, 17, Sarah, 15 and Bobbie, ten.
She also receives Disability Living Allowance of £61.85 per week, Housing Benefit of £650 per month, Child Allowance of £80 per month and a mobility car. Jodie used all of her savings to pay her energy bills and now lives on credit.
She said: “As a mum, I lay awake at night wondering what pennies I can find around the house to buy bread and milk.
“I need the car to pick up the kids and it’s the only way I can enjoy some degree of mobility with my condition. I can’t reduce my costs any longer and I’m afraid I’ll end up in deep debt.
Jim from the Squeeze team said: “Jodie has little room to fight inflation.
She depends on the increase in her benefits. Financial services charge of £720 a year could be reduced by changing credit cards and interest payments. She could try to reduce her expenses by using discount supermarkets.
Here we reveal the cost spiral hitting three other households and offer tips to help them save.
Chloe McMullin earns £25,000 and her personal inflation rate is… 15%
RISE in fuel costs has Chloe McMullin struggling to keep her decade-old mobile hair business afloat.
Chloe, 30, who lives near Plymouth, said: “Diesel prices have skyrocketed and my bottom line has been hit hard.
“I was just getting back on my feet after the lockdown and operating on a small profit margin and that was swallowed up by diesel costs.
“My vehicle costs are also high because I use my car on country roads and there is a lot of wear and tear.
“I reduced all my personal costs and was not shocked when my personal inflation rate turned out to be well above the national average.”
Jim from Squeeze Team said: “Chloe spends £1,000 a year on sports, gardening and pets. Gym memberships can be ditched while exercising outdoors or at home and there are plenty of cheap gardening hacks on the internet.
“Spending £500 on e-entertainment could be reduced by switching to a mobile-only SIM card and changing internet provider. She could also find second-hand white goods on websites or charity shops.
- Vehicle costs (annual): £1,500
- Petrol or diesel (annual): £4,160
- Food (monthly): £200
- Alcohol & tobacco (monthly): £10
- Mortgage (monthly): £375
- Water, gas, electricity (monthly): £300
- Travel (monthly): £150
Josh Waters earns £23,000 and his personal inflation rate is… 11%
Single father Josh Waters, 30, says he expects his personal inflation rate to continue to soar.
Josh is a support worker from Falmouth, Cornwall.
He said: “I was shocked to see my inflation rate. The impact of fuel and heating costs is frightening.
“I have to drive to see clients and the fuel cripples my ability to do my job.
“All I focus on now is cheap supermarkets, money for my daughter and paying the mortgage.”
Jim from Team Squeeze said: “Josh has to look at the £1000 a year he spends on personal effects.
“He has to go through it point by point and see what he can cut.
“And essential items could be cheaper. Does he need to buy branded products?
“He also pays £1,500 a year for housekeeping. He should see if he can do some of the work himself or have it done for less.
“There are tutorials online showing you how to fix things. Although you should never try gas or electric without training, there’s no harm in trying to set up shelving.”
- Vehicle costs (annual): £2,200
- Petrol or diesel (annual): £4,200
- Food (monthly): £240
- Alcohol & tobacco (monthly): £50
- Mortgage (monthly): £615
- Water, gas, electricity (monthly): £320
- Travel (monthly): £80
The Keoughs earn £32,000 and their personal inflation rate is… 11%
Property maintenance boss and gardener Stephen Keough and his wife Gemma, owner of a modeling agency, spend most of their income on rent.
The couple, both 33, from Chadderton, Manchester, who have three children, are selling items on eBay to cover the rising cost of food and heating bills.
Stephen said: “I’m surprised our inflation rate isn’t higher. I recently had to sell my beloved white van due to high running costs and replace it to keep my property maintenance business alive.
“Gemma managed to get us a fixed price gas and electricity contract last year, but when it runs out in October we are terrified it will double or even triple.”
Jim from Squeeze Team said: “Gemma and Steven are spending £4,200 on insurance.
“This could be reduced by using a price comparison website as the insurance remains quite competitive.
“The same goes for their communications fee of £90 a month. The mobile phone and internet market is fiercely competitive and savvy buyers can get great deals.
“They may surprise themselves at how much they can reduce their bills.”
ADDITIONAL REPORTS: EINSTEIN ALLEY
- Vehicle costs (annual): £1,000
- Petrol/diesel (annual): £12,000
- Food (monthly): £400
- Alcohol & tobacco (monthly): £150
- Monthly rent): £703
- Water, gas, electricity (monthly): £210
- Travel (monthly): £100