Cost of Living 101 - what’s it all about?

Cost of Living 101: what’s it all about?

In our first article about managing the cost of living together, we explore how and why it’s come about. Plus, win a £25 Love2shop Gift Card to spend in Heron Foods!

Date:

28 July, 2022

Cost of Living 101 - what’s it all about?

Welcome

Welcome to Park’s ‘Summer of Savings’ blog where we will explore all sorts of issues emerging from the cost of living crisis. Each week we will look at a different subject, bring you people’s experiences, thoughts, tips and solutions in the hope we can manage the cost of living, together.

And if you fancy stocking up your cupboards on us, read on. We’ve partnered with Heron Foods who are famous for top quality, low price stores Heron Foods have kindly offered our PARK readers the chance to win one of four £25 Love2shop Cards that are now accepted at Heron Foods. Their brands include top notch frozen foods from Birds Eye to McCain Foods and for bigger bargains they have their own brand items, too.

What you need to know

Show us a day when the words ‘cost of living’ don’t crop up in conversation, in the news, or on TV in general. And could you point out a person it doesn’t affect? It really is absolutely everywhere, and no-one can dodge it altogether. But how did we get here and how are we all feeling its far-reaching effects?

Cost of Living - What you need to know

Cost of making, producing and transporting everyday items has gone up

The increase of cost of living is the result of everyday goods becoming more expensive to buy, whether that’s groceries, gas and electricity, or fuel to run our cars, vans, lorries and motorbikes – to name a few. In June 2022, inflation reached an unprecedented high that hasn’t been seen in 40 years. Rates have risen by 9.4%, showing just how much the cost of living crisis is spiralling.

Owing to things rising in price, the buying power of money decreases – this is what leads to inflation. Anti-poverty campaigners have said that, as a result, affected households are facing the worst cost of living crisis since the 1970s.

Cost of making, producing and transporting everyday items

Why is the cost of living rising?

There seems to be hundreds of reasons for what’s happening, some gaining more focus in the press than others. Russia’s war in Ukraine is responsible for some of them – in, for example, its significant effect on the supply and demand of key essential goods such as oil, gas and even wheat. However, the cost of living crisis was around before the war started.

Here are a handful of points…

  • Pandemic - The pandemic had a massive impact on cost of living as suppliers were unable to foresee the extent of Covid-19 and its devastating impact on global industries. Obstacles such as shipping delays, staff isolating and factories temporarily closing due to lockdowns created the perfect storm of problems.

  • Gas prices - From April 2021 to April 2022, domestic gas prices increased 95% and domestic electricity by 54%. A lot of countries faced colder than average winters in 2021, causing an unprecedented demand for energy across the world.

  • Russia’s war in Ukraine - Russia is one of the world’s largest gas suppliers – it’s in the top three when it comes to producing crude oil. It’s also home to a quarter of the globe’s natural gas reserves. In solidarity with Ukraine, the EU, UK and US announced the end of importing Russian commodities. As a result, the World Food Bank forecasts that a household’s average energy costs will jump up by about 50% by the end of the 2022.

  • Cost of essential food items - Food prices have shot up because the Ukraine is the fifth largest wheat and sunflower oil producer in the world, and as they are basic essentials to so many countries this has caused a domino effect. Port cities on the Black Sea are dealing with Russian blockades, detrimental to trade as Ukraine exported most of its goods via ships. The Food and Agriculture Organisation reported that world wheat prices soared by 19.7% in March, 2022.

"Thanks to our new partner, Heron Foods, for helping us to manage the cost of living together by offering the PARK community the chance to win one of four £25 Heron Foods Gift Cards."

Heron Foods

Household incomes declining

A lot of UK households are seeing a cut to their incomes, which can be partially blamed on a reduction in the number of benefits they receive. According to think tank, The Joseph Rowntree Foundation, 9 million families on benefits due to low incomes will be £500 worse off due to inflation from April 2022.

Government data shows that wages started to become stagnant in November 2020. There has been a tiny bit of an increase in April 2021, but the pulse of rising wages has flat-lined again. Everything is going up in price, but wages are staying put.

Household incomes declining

What is the everyday impact?

Want to know what other people think and how they’re affected? Click here to read some of Park’s employees’ reactions to, and experiences of, the cost of living crisis.

It goes without saying that all this cost of living stuff is going to have consequences, but what are they? Broad reaching, the costs will affect almost every aspect of most people’s lives.

Here’s a quick rundown on areas to keep an eye on…

  • Everyday travel in cars, vans and motorbikes - Fuel prices are at an all-time high, so filling up is eye-wateringly expensive. People are saying they are cutting down on unnecessary car journeys, saving up a string of things to do in their car so they can limit it to one trip, or even dusting down their bikes and getting on them again.

  • The rise and rise of energy costs - Statistics say that households can expect energy bills to increase by 54% - that’s equal to £693 more a year on bills.

  • Groceries - Compared to last year, the price rise of groceries has shot up so much, household items, consumers and supermarkets have become another hot topic for the media, consumers, and activists – right next to the next Tory leader debate and the Russian war in Ukraine.

    Food costs have risen by 4.5%, while non-alcoholic drinks have increased by 3.2%. A family of four can expect their annual food bill to go up by £380.

  • Mental health - Mental health charities have reported an increase in demand for their services. It’s no surprise to learn that, surveys say that the cost of living crisis is affecting mental health, with a growing concern about rising requests for help with anxiety and depression, but will there be an impact on suicide rates? (We hope not.) The cost of living crisis is only serving to amplify the concern that so many people already have.

Useful links and join Park's early bird planners for free

If you’d like to find some useful resources, the links in our ‘managing the cost of living together’ section may help.

If you’d like to find out about Park’s Christmas Savings, which is free to join, and how early bird planning might help you, click here….

Competition: Win a £25 Heron Foods Gift Card!

To help launch our Summer of Savings, four lucky winners will get to top up their freezer or cupboards thanks to new retail partner, @HeronFoods. We are offering PARK customers a £25 Love2shop Gift Card that can now be spent in Heron Foods

To enter, send us an email at [email protected] telling us what you always pick up when you shop at Heron Foods and why you can’t go without it.

Feel stuck? Go to the Heron Foods website for some inspo - https://heronfoods.com/

Don’t forget, Heron Foods also accept The Purple Card, Love2Shop Gift Card, and Love2shop Vouchers.

T&Cs apply – here.

PLEASE NOTE, THIS COMPETITION IS NOW CLOSED

Competition: Win a £25 Heron Foods Gift Card

Money-saving tips

Money-saving tips will undoubtedly be of help during the cost of living crisis, here are some great resources: