Household incomes expected to go down over the next 3 years

Unfortunately for families in the UK, 2022 will see a widely reported cost of living squeeze. This means that prices will go up, which will not be matched by increases in wages. In fact, the Bank of England has specifically advised against asking for a big pay raise!

In January, Think Tank the Resolution Foundation reported that the average family will be over £1,000 worse off this year, thanks mainly to spiraling energy prices. The energy price crisis began in late 2021, due to increased demand in natural gas from Asia and Europe.

This was caused by more people heating homes during the winter (potentially due to people working from home during the day), plus many industries ramping up production to offset the drop in productivity during successive lockdowns.

Higher demand means higher prices, which is being passed on the UK consumers in the form of a 54% increase in the price cap on April 1st. This will make the average family home’s energy bill go up by £693. There will also be another increase, expected to be around 40%, in October.

The report suggests the squeeze will have a knock-on effect for years, with household incomes in 2025 - 2026 expected to be lower than in 2021 - 2022.

The tragic situation in Ukraine is already having a knock-on effect on the price of oil, which is currently at the highest price for 14 years.

Add to this the rise in National Insurance contributions and an expected inflation rate of 7% this year, and most families will need to look for smart ways to save money.

A key way you can offset the extra costs is by managing your subscriptions and cancel unwanted ones. Natwest reports that the average adult wastes £39 a month on unused subscriptions. In a household with two adults, this adds up to £936 per year. That’s nearly £30,000 over a lifetime!

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Little Birdie is here to help. Not only can we cancel your unwanted subscriptions, saving nearly all of the average £1,000 cost per household, but we can also help you switch to better deals.

Little Birdie will also manage your free trials, meaning that you don’t accidentally sign up to unwanted subscriptions in the first place. Best of all? Our app is totally free to use. Head over to the App Store to sign up for free and let us help you take some of the financial pain out of 2022.