“We want it to get better, we want some light,” says Alison Burns. Her family is feeling the financial pain caused by Covid and now the cost of living crisis. “But while the government keeps throwing everything at us, I can’t see any light at the end of the tunnel. How is any of this going to be made better?”
Burns, who lives with her husband, Steven, and two children, Lewis and Alice, in Borehamwood, Hertfordshire, says money is tight. “Like a lot of people our finances haven’t recovered from Covid and all these budgets have hurt each and every way,” she says. “It is people who are working and on the breadline that are suffering the most.”
In a gloomy postmortem of the chancellor’s autumn statement, the Office for Budget Responsibility, the government spending watchdog, warned that the biggest fall in living standards since records began lies on the horizon, with wages failing to keep pace with inflation and recession hitting home. The Institute for Fiscal Studies thinktank concluded: “Virtually all of us can expect to be worse off.”
For those already struggling to keep their heads above water in the cost of living crisis, it is hard to imagine how things could get any worse.
Steven was made redundant from a well-paid job at the start of the Covid pandemic and although back working, as a self-employed sales consultant, his earnings have yet to recover. Alison works part-time for a school technology firm but says her £300 childcare bill eats into her pay packet. “If they want more people back working they need to help with childcare costs,” she says.
With a combined income of £26,500, the family is entitled to a monthly universal credit payment of £395. They also received this year’s £650 cost of living payment. If their circumstances remain the same they should have more help next year after the chancellor confirmed means-tested benefits will rise by 10.1% to match inflation. They are also likely to qualify for next year’s cost of living payment which has been upped to £900.
But April seems a long time off and there is still the worst of the winter to get through. The family still hasn’t turned the heating on and Alison admits it has “been a bit nippy” in the house. They monitor their smart meter display closely, with long showers among the casualties as they try to keep a lid on energy bills.
But even without the heating on Steven says their monthly energy bill has risen from £115 to £170. The government has made a “bad situation worse” over the last six months, he suggests: “The people you rely on to get things right have really badly messed up and we are the ones who suffer by taxes increasing and inflation going up.”
In the meantime, the things the family needs to buy cost more, a fact confirmed by the latest official data which put the UK’s annual inflation rate at a 41-year-high of 11.1%. Food price inflation rose from 14.6% to 16.4% – its highest level since 1977, with big increases in the cost of staples such as milk, butter, cheese, pasta and eggs.
Alison reels off a list of items that have gone up in price, from the petrol to drive her kids to school (public transport is not an option), to insurance, groceries, energy, all of which leaves her scouring the web, such as parenting website Netmums, for money-saving strategies and advice.
The 44-year-old now shops exclusively in the German discount supermarket Lidl. She is not alone. This week, Lidl GB boss Ryan McDonnell said the company was now serving 770,000 more customers a week than this time last year. When times were better Alison also shopped in Tesco but she stopped visiting the supermarket about six months ago.
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The scale of food inflation means that even in Lidl prices are creeping up. “My food shop with Lidl used to be around the £86 mark which I thought was good for a family shop, with fresh fruit and vegetables, but now it is £120,” she says. “If you have to stock up on bigger items like washing powder the bill can push the £200 mark. I’ve stopped buying brands, like Ariel and Comfort, because they are too expensive.”
There is also the need to find extra money in the household budget for Christmas presents and other extras as the holiday season approaches. “As much as it is getting by every month, I’ve still got to get Christmas into the equation as well,” says Alison.
Jennifer Howze, the editorial director of Netmums, said it was picking up on a lot of anxiety. “Normal working families tell us they are genuinely worried about how they are going to make ends meet. The budget goes some way to help the most vulnerable, but it doesn’t go nearly far enough for the majority of working families. The burden of increased taxes and rising childcare costs actually makes it financially prohibitive for some parents to work.”
The measures announced in the budget brought nothing new in the short term for the Burns family. “We are not going to see any immediate relief,” says Alison. “We will all suffer until spring, and money will be tight for us all.”