If you’ve noticed your shopping basket costing more each week, your energy bill creeping higher, or your rent swallowing more of your income, you’re not imagining it. Rising costs in the UK are affecting nearly every household, making it harder for wages to stretch to the end of the month.
This article explores why prices are rising in the UK, how it impacts households, and practical steps you can take to cope day-to-day with the cost of living increasing.
Why are prices rising in the UK?
The cost of living has been increasing for several years, but the pace of recent rises has been particularly sharp. Several factors explain why everything feels more expensive.
1. Inflation
Inflation is the rate at which prices rise. The Bank of England aims to keep inflation around 2%, but in recent years it has been much higher. When inflation rises faster than wages, it means money doesn’t go as far. Everyday items such as milk, bread, and fuel have all increased noticeably.
2. Energy prices
The cost of gas and electricity soared after global supply issues and the war in Ukraine disrupted markets. While government schemes provided temporary relief, households are still paying more than before.
3. Food and supply chains
Shortages of some foods, higher transport costs, and poor harvests caused by climate change have all pushed food prices up. Essentials such as fruit, vegetables, and dairy products are noticeably more expensive.
4. Housing costs
Renters in particular have faced steep increases. With demand for housing outstripping supply in many areas, rents have risen faster than wages. For some, this has led to rent arrears. Homeowners with variable-rate mortgages have also seen repayments rise as interest rates have increased.
5. Borrowing costs
To help bring inflation down, the Bank of England has raised interest rates. This makes it more expensive to borrow money through loans, mortgages, and credit cards. For people already in debt, that means it can take longer and cost more to clear balances.
A timeline of rising costs in the UK
To understand the current situation, it helps to look back over the last few years:
- 2020 – The pandemic disrupted supply chains, but prices were largely stable because demand dropped.
- 2021 – As economies reopened, demand surged. Supply couldn’t keep up, leading to shortages and rising prices.
- 2022 – The war in Ukraine drove global energy costs sharply higher. UK households saw record increases in gas and electricity bills.
- 2023 – Inflation peaked at levels not seen in decades. Food and fuel prices were particularly hard-hit.
- 2024 onwards – While inflation began to ease, prices didn’t fall back. Instead, they stabilised at higher levels, leaving households still paying more.
How rising costs affect different households
Not everyone experiences the cost of living crisis in the same way.
- Families with children face higher food, childcare, and clothing costs. School holidays often bring extra expenses for childcare and activities.
- Renters may see a large portion of income swallowed by rent increases, sometimes leaving little for essentials.
- People already in debt may struggle as interest charges eat into income. Credit card debt can be particularly challenging, as minimum payments may no longer reduce the balance.
- Pensioners on fixed incomes may find their money doesn’t cover the same essentials as before.
- Students face rising rent in university towns alongside higher food and travel costs.
- Self-employed people with irregular incomes may struggle to predict cashflow while bills remain consistently high.
Coping with rising costs day to day
While you can’t control inflation or energy markets, there are practical steps to make your money stretch further.
1. Focus on priority spending
Cover rent, council tax, gas, and electricity first. These are classed as priority debts. Missing them can have serious consequences.
2. Cut food bills where possible
- Plan meals around supermarket deals.
- Swap branded products for own-label versions.
- Use discount supermarkets where possible.
- Batch cook and freeze portions.
3. Save energy
- Turn appliances off at the wall rather than leaving them on standby.
- Wash clothes at lower temperatures.
- Use timers for heating so it’s only on when needed.
4. Review travel
Fuel costs can be reduced by car-sharing or using fuel price comparison apps. For public transport, season tickets or bulk passes often save money.
5. Check for unused subscriptions
Small payments for apps or services add up. Cancelling or pausing subscriptions can free up extra money.
Income support and extra help
Don’t overlook extra sources of support:
- Universal Credit or other benefits if eligible.
- Local council hardship funds.
- Energy supplier schemes for those struggling with bills.
- Charitable grants depending on circumstances.
Longer-term strategies
Once the immediate pressure is under control, longer-term planning makes a difference.
- Build an emergency fund, even if small, to reduce reliance on credit.
- Keep a clear budget with visibility of income and spending.
- Seek advice early if debt grows.
- Explore consolidation or structured repayment if balances feel unmanageable.
Taking back a sense of control
Rising costs in the UK can feel overwhelming, but you’re not powerless. Small changes, clear priorities, and exploring support options can ease pressure and prevent debt from worsening. For free debt advice, you can visit MoneyHelper.
Or, here at MoneyPlus, we provide confidential, non-judgmental advice tailored to your situation. Whether it’s support with priority bills, credit cards, or rent arrears, we’ll help you find a path forward.
If the cost of living increasing has left you worried, contact a MoneyPlus adviser today for practical guidance.
