Money Wellness
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category iconcost of living
calendar icon08 Aug 2023

Two years of wage rises predicted to ease the cost of living crisis

Average earning figures due to be released next week are likely to reveal wages rising faster than inflation for the first time in more than a year - signalling the start of an ease from cost of living pressures for some families.

Next week’s consumer price index (CPI) is expected to fall to about 6.8% from 7.9% in June, according to Bank of England forecasts.

Meanwhile average earnings data due to be announced the following day are likely to show a rise in wages by more than 7 % - a figure higher than inflation for the first time in 14 months.

Economist now expect wages to grow faster than inflation until at least 2025.

This will present a headache for the Bank of England that’s repeatedly stated it requires wages to remain static to help get inflation down to its target of 2%.

And homeowners and renters won’t necessarily feel the benefits straightaway, with much of the growth in pay being eaten up by larger mortgage and rent payments and higher utility and food bills.

In fact, economists believe that household disposable income could remain below where it was before the pandemic until at least 2025.

However, it does offer a glimmer of hope that for some families the worst of the cost-of-living crisis could be over.

 

Are you struggling with the cost-of-living crisis?

If you’re struggling to make ends meet or don’t have enough money for essentials like food and bills, you might be able to get help.

You should check to see if you’re entitled to benefits or help from the household support fund (HSF) or a cost of living payment.

You might be able to claim benefits or increase your current benefits if you’re:

  • Of working age and on a low income
  • Sick or disabled
  • Of state pension age and on a low income
  • A carer
  • Responsible for children

The government will send you a ‘cost of living’ payment if you:

  • Get certain benefits such as universal credit, pension credit, PIP, income related ESA or attendance allowance
  • Are over state pension age and get winter fuel payment

You will receive payment for each benefit you claim, e.g. if you claim universal credit and attendance allowance, you’ll get 2 cost of living payments,

You won’t have to pay tax on cost of living payments and they won’t count as income when calculating your benefits.

Your local council may also be able to help you if you’re struggling with the cost of living through the household support fund (HSF). They might help you pay for things like:

  • Your energy and water bills
  • Food
  • Essential items such as clothes or household equipment

You don’t need to be getting benefits to get help from your local council. If you do get benefits, they won’t be affected if you receive support from the HSF.

Each council has chosen how to allocate its HSF scheme so what you get will depend on your local council’s policy. Some are offering vouchers and others will pay money directly into your bank account.

To find out what’s available from your council, visit their website. You can find your local council website at www.gov.uk

Avatar of Caroline Chell

Caroline Chell

Caroline has worked in financial communications for more than 10 years, writing content on subjects such as pensions, mortgages, loans and credit cards, as well as stockbroking and investment advice.

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