Many are feeling the impact of the increasing cost of living on their finances, with the inflation rate soaring to a 30 year high of 6.2 per cent in February.
As prices rise across the UK, from the strain of increased energy, fuel, and food costs, individuals may have been searching for ways to maintain their standard of living.
According to research from Avon, almost two thirds of British people are worried about the impact of inflation on their finances.
This is having a knock-on effect of people cutting down on spending, with over 45.2 million people reportedly reducing their expenditure.
From the research, it was apparent that some (nearly two fifths of women) are considering or have already obtained an alternate source of income.
What measures can individuals take?
Whilst cutting down on spending is one option, there are some necessary outgoings that cannot easily be reduced or stopped, such as the volatile fuel prices.
However, you may be able to make savings elsewhere, such as:
- Checking whether you are entitled to a Council Tax Reduction
- Opting to use public transport for short journeys
- Keeping track of income and outgoings, whilst setting out a budget
- Investing in household energy saving measures (to utilise the 0 per cent VAT rate)
Alternatively, there is the option to try and increase your income and maximise your savings.
One way to do this could be by taking advantage of the tax-free ISA allowance ahead of the end of the tax year (5 April).
During the Spring Statement last week, the Chancellor did announce measures that some individuals may benefit from.
For instance, the upcoming increase in the National Insurance Primary Threshold and Lower Profits Limit from £9,880 to £12,570 in July 2022 is equivalent to a tax cut of £330, according to the Chancellor.
Despite this move, for those on higher incomes the amount of tax paid may still increase – due to the additional 1.25 per cent health and social care levy.
For advice with related matters, contact our expert team today.