The cost of living crisis has been on the forefront of all our minds' this year, as we adjust to how expensive it has become to exist. And sadly, the tide isn't set to turn anytime soon. Young Women Trust has released a new survey, detailing that the cost of living crisis is even worse for women.
They found that 56% of young women described their current financial situation as uncomfortable. This has increased from 49% in 2022. In comparison, just over 40% of young men said the same both this year and last – so young men’s experience seems to be stabilising whereas young women’s has got substantially worse. Moreover, they found that almost a third (32%) of young women have been unable to afford food or essential supplies, up from a quarter last year. This compares to 21% of young men. The research found that 1/4 of young women have fallen behind on rent or bills in the last year – only 16% of young men said the same.
So, why this gender gap? Young Women Trust say that it's linked to the gender pay gap, “earning less than men of the same age to begin with, young women have had even fewer resources to get them through. And given barriers like the cost of childcare, lack of flexible working options, and direct discrimination, they have fewer routes to increasing their incomes in order to cope. This year, young women are saying their financial situation has got worse, they’re more likely to be struggling to make their cash last to the end of the month, and getting into more debt.”
“While the cost of living crisis is affecting everyone, the gulf between young women’s experience of it and young men’s seems to be growing – a symptom of a deeper inequality that exists right from the start of working life,” said the Trust.
Although inflation has started falling, new research from the independent thinktank Resolution Foundation predicts that UK workers’ living standards will decrease dramatically next year, leaving them “4%” worse off than they were in 2019.
“Typical working-age households are on track for a year of income stagnation in the run-up to the next election, and poorer families are set for further income falls, as tax rises, the end of cost-of-living payments and higher housing costs offset an improving economic outlook,” the thinktank revealed, sharing their findings with the public. As with most financial blows, low-to-middle income households are most at risk.
It goes without saying that we're all familiar with the basic responsibilities of adulthood. We must pay our rent on time; stay on top of bills; keep our fridges stocked and our petrol tanks full; as well as covering the cost of childcare and travelling into work. That's before we even take into account gym memberships, streaming subscriptions, and other necessities such as cleaning products, personal care items, and the clothes on our backs. But the cost of living crisis has undoubtedly made things more difficult.
In 2022, while we were all still familiarising ourselves with the economic crisis, GLAMOUR UK sought the advice of experts. See what they had to say, below.
The cost of living crisis is already here, but it’s far from over.
What is the cost of living crisis?
The Institute For Government described the crisis as, “the fall in ‘real’ disposable incomes (that is, adjusted for inflation and after taxes and benefits) that the UK has experienced since late 2021,” adding that it's being predominantly caused by “high inflation outstripping wage and benefit increases and has been further exacerbated by recent tax increases.”
Makala Green, author of The Money Edit (published by Yellow Kit) also noted that the cost of living crisis refers to “rising prices that cause disposable income (income left after expenses) to decline. We are experiencing the highest inflation in decades, which means the cost of living for many has become unaffordable.”
Some key terms to grasp here are “real disposable income” and “inflation.” The former essentially refers to the money you have left after taxes (such as national insurance and student loan repayments) are deducted, and when benefits (such as Universal Credit or Disability Living Allowance) are added. Inflation, on the other hand, is the term used to describe prices increases over time. The rate of inflation is measured every month by the National Office for Statistics. You can see how the prices for goods and services have changed over time using this calculator.
What caused the cost of living crisis?
Laura Howard, finance expert at Forbes Advisor, advised GLAMOUR UK readers that the cost of living crisis was “essentially the result of a perfect storm.” She identified the following factors which contributed to the crisis:
Covid-19: “Not just the economic fallout, but the subsequent surge in demand for manufactured products as various markets have reopened, which has had a knock-on effect of driving up prices.”
Rocketing energy costs: “Initially due to factors including a lack of wholesale gas supply following an unusually cold winter in 2020-21, then exacerbated by the tragic (still ongoing) conflict between Russia and Ukraine – Russia being a major international gas supplier.”
Food prices: "These have also been steadily climbing, due to factors ranging from changing global weather to a shortage of delivery drivers. A pint of milk, for example, cost 51p in April 2022, compared to 42p in April 2021, according to the Office for National Statistics (ONS).
Inflation: "[This is] a measure of the rising costs of goods and services. It’s based on a vast and virtual basket of goods which is updated each year to reflect changing consumer spending patterns. In 2022, meat-free sausages, canned pulses, sports bras, pet collars and antibacterial surface wipes have been added to the basket, while donuts, men’s suits and coal were taken out. The main categories these changing items fall under however, stay consistent. They include the fundamentals such as housing, transport, communication, health, and clothing. However, each category will be applied a different weighting every year.
When considering inflation, Laura advises that, “each household and individual will have their own ‘personal’ rate of inflation. For example, if you are a large-family household who does a big weekly food shop, uses a lot of energy at home and ferries the kids around in the car all day, the soaring cost of food, energy, and petrol is going to hit particularly hard.”
Makala and Laura advised GLAMOUR UK readers that the following expenses were increasing: Gas and electricity, House prices, Rent, Fuel, Food and non-alcoholic beverages, Clothing and footwear, Transportation, and Healthcare.
The cost of living crisis has only exacerbated my feelings.
What did the government do in 2022 to help those affected by the crisis?
In May 2022, the HM Treasury released a statement confirming that millions of UK households would be eligible to benefit from £15 billion of targeted government support to help with the rising cost of living. The support package was partly funded through a 25% windfall tax on the “extraordinary” oil and gas firms' profits, which had increased in the months leading up to the government scheme.
Prime Minister Rishi Sunak, who was then serving as the Chancellor of the Exchequer, said: “We have a collective responsibility to help those who are paying the highest price for the high inflation we face. That is why I’m targeting this significant support to millions of the most vulnerable people in our society. I said we would stand by people and that is what this support does today.”
Every household in the UK received a discount on their energy bills. Eight million households on means-tested benefits received an extra £650 paid directly into their bank accounts in two lump sums. Meanwhile, pensioners received a one-off payment of £300.
What is being done now, in 2023, to help those in need?
As of September 2023, the government has a Cost Of Living Support landing page on Direct Gov, which lists the ways in which people can obtain assistance. Members of the public are able to check if they're eligible for any financial support via a series of questions.
For anyone who might be struggling to keep up with their rising energy bills, the British Gas Energy Trust offers advice and, in some cases, financial support, and you do not have to be a customer of British Gas to access this help.
The staggering increase in our supermarket bills has been a point of contention throughout the year, and understandably so. For anyone struggling to feed themselves or their families, there are food banks set up across the UK. You can find your local food bank via this interactive map created by The Trussell Trust charity.
