“Winter is our big fear at the moment because we don’t know exactly how it’s going to shake out. All we know is we’re basically going to be skint,” says Dan Collins, of the impact rising living costs are having on his family.
Collins and his partner, Lucy Woolhead, welcomed identical twins Scarlett and Beatrix in February and their short lives have been in step with the cost of living crisis. While official figures published on Wednesday showed runaway inflation dipped below 10% last month, as lower petrol and diesel prices offset dearer food, Sarah Coles of the analysts Hargreaves Lansdown said this was just a “pause for breath”.
Coles said motoring costs were more of a concern for those on higher incomes, and low earners remained under pressure. “Those on the lowest incomes, who are suffering the most as a result of rising prices, are still facing impossible energy bills and horrible hikes in the cost of food,” she said.
The rising price of the weekly shop is putting household budgets under intense strain, with the average annual grocery bill now £5,181, up £571 or 12.4%, according to the market research firm Kantar. Collins and Woolhead, who are in their mid-30s, rent a terrace house in her home town of Leighton Buzzard, Bedfordshire. They had “just about enough money coming in” to cover their outgoings and buy groceries until April, when their energy bill increased by £130 a month.
When the price cap rose to almost £2,000 for a typical household back in April, their direct debit almost doubled to £270, forcing them to slash their food budget. Most of their shopping now comes from Aldi, the grocery discounter that, amid a dash to save money, has just overtaken Morrisons as the UK’s fourth largest supermarket.
“We were buying some bits in Tesco but we’ve had to stop doing that pretty much,” Collins says. “We also get quite a bit of our housing supplies and stuff for the girls from Poundland.”
The couple were braced for their energy bill to increase again next month after Ofgem announced the price cap would move up to a staggering £3,549 in October. However, this is not happening after the government stepped in with its “energy price guarantee” to cap bills at £2,500.
The energy bailout means a less bleak outlook for winter. However, many still have much higher energy costs than a year ago, when the cap was only £1,138. “It’s better than it was going to be but it [energy] is still going to take up all of our spending money,” Collins says.
“The current cap leaves us with just £50 for groceries, baby stuff and fuel,” Woolhead adds. “We’re left with essentially £200 a month of spending money.”
Collins, who is paid just over the minimum wage as a copywriter, earns about £1,500 a month, with their income bolstered by charity worker Woolhead’s statutory maternity pay, as well as child benefit and universal credit payments. The financial picture meant they qualified for the first government cost of living payment, worth £326.
Having to think about money all the time has taken away some of the joy of becoming parents, says Woolhead, who is sad not to have the cash to buy extras, such as sensory toys, for the girls, who were born at 28 weeks and spent the first 11 weeks of their lives in Luton and Dunstable hospital.
“I’m still happy in the day-to-day but it is a lot harder to be happy because you have got this whole thing looming over you,” Woolhead says.
Parents were more likely than those without children to be cutting back on nonessentials and using credit more than usual because of rising living costs, according to a recent Office for National Statistics analysis that looked at how different household types were coping with the crisis.
About two-thirds of parents told its researchers they were reducing spending on nonessentials, compared with 56% of those without children. The poll, carried out between 30 March and 19 June, found a third of those with dependants were unable to afford an unexpected expense, compared with about a quarter of nonparents.
The average weekly spending for households with one or more children equalled 69% of their disposable income but this rose to 87% for single parents, the ONS said. In contrast, households without children spent about 64% of their disposable income. Households with children also spent more than those without on home energy and fuel such as gas and electricity.
Collins and Woolhead now use their car as little as possible and, having dropped their Tesco trips, are running out of budgeting rope and are having to knock items off their shopping list. They scour forums on parenting and budgeting sites for money-saving ideas but at this rate will have little option but to skip meals or eat smaller portions, Collins says.
They are not alone. A survey of 1,345 families by the parenting site Netmums found two-thirds were only buying essential food items, while a similar number were making portion sizes smaller. About a third were buying less meat, it said, while a fifth were buying less fresh produce. An alarming 43% said they were skipping meals so their children could eat.
Jennifer Howze, the site’s editorial director, said it was picking up a lot of anxiety. “People are saying that they are at their wit’s end. They are talking about boiling the kettle at the beginning of the day and putting it in a Thermos so they don’t have to boil it more than once.”
Almost 80% were buying secondhand clothes, while two-thirds were taking hand-me-downs from friends or neighbours, according to the Netmums poll. To gather the paraphernalia they needed, Collins and Woolhead held an American-style baby shower even though such an event was “totally not our style”.
Collins says: “Our friends and family have been incredibly generous and helpful, otherwise we wouldn’t have a pram, car seats, changing table and cots. We’ve been donated bags and bags of clothes from other parents. I can only imagine what parents who don’t have that support network have to do.”
To save money the couple have switched from disposable nappies (which were costing about £20 a month) to reusable ones. However, they are worried about drying the liners in the wintertime because they do not have a tumble dryer and will be closely monitoring energy use.
With some Britons considering not turning on the heating at all this winter, Collins says they don’t have a choice. “We have to put the heating on because if we don’t the girls’ health is at risk,” he says. “It is quite an old house and not very well insulated, so the heat just goes when you turn the heating off. If it was just us we’d be able to wrap up warm and deal with it.”
