Family finances are now so strained that 22% of people say they've already reached their affordability tipping point, where the cost of day to day living is so high that consumers can no longer stretch their finances to make ends meet, according to research from moneysupermarket.com.
Four in ten adults say the soaring cost of petrol, which has seen a litre rise to above £1.33 for the first time, has had the biggest impact on spending and budgeting over the past 12 months, while a quarter say it is the rising cost of food that is causing the biggest strain.
Clare Francis, personal finance expert at moneysupermarket.com, said: "The increase in the cost of living is something UK adults have had to bear the brunt of over the last 12 months. The rising price of petrol and everyday basics such as food and energy have hit consumers hard, and at times it can feel like it is impossible to make any more savings when essentials are rising so steeply. However, there are still small steps that people can take that will help save those vital pennies.
"Sitting down and looking at all of your outgoings, and shopping around or using a comparison website to make sure you are on the best product for your individual needs, is a great way of giving yourself a pay rise. Many consumers are paying far more than they need to for their household bills and there are significant savings to be had by switching to a better energy tariff and making sure that you find the best deal when your car or home insurance is up for renewal - the savings can literally add up to hundreds of pounds over the course of the year."
Here, we take a look at what you can do to help ease the strain...
Cut insurance bills
Don't just accept the renewal quotes offered to you by your
car and home insurance companies as you may be able to get a better deal elsewhere. For example, the average saving consumers can make by using moneysupermarket.com to buy their home insurance premium is £127, while you could save £282 on average by using the site to search for the best car insurance quotes.
Save on petrol costs
It might sound simple, but try and reduce the amount of petrol you use by walking or using public transport whenever possible. You should also seek out the cheapest petrol and diesel costs in your area through the site petrolprices.com. Register with the site and you can find the lowest UK petrol prices in your area - the site searches 11,030 petrol stations to find the top deals.
Switch utility supplier
Two in ten people say it is the rising cost of paying for utility bills such as heating which is causing them the biggest financial strain. But
switching suppliers could save you hundreds of pounds a year.
According to moneysupermarket.com, across Britain, households who have never switched provider could save an impressive £265 a year on average if they moved from the incumbent provider's standard tariff and opted for the best value deal.
If all the households which are yet to change from their incumbent provider moved to the best possible deal, the country could collectively save £3.2 billion on its energy bills.
Reduce food bills
Try writing a meal plan every week to cut down on wasted food. You can also reduce your weekly food bills by changing where you shop. The website mysupermarket.com is worth a look, as it shows you exactly how much your regular shop would cost at different supermarkets. That means you can make sure you're getting the best prices for your specific basket.
Use discount vouchers
Never buy anything online without checking to see if there is a discount voucher available which can get you money off your purchases. The vouchers channel on moneysupermarket.com enables you to type in a store or product you want a voucher code for so you can track down discounts.
Don't pay more than you need to for borrowing
When was the last time you reviewed your mortgage and credit cards to see if you can find a better deal elsewhere? If you are paying a high rate of interest on your borrowings, you could reduce your monthly outgoings substantially by switching to better deals. The good news is there are plenty of good offers available to help keep costs down. For example, if you are paying a high rate of interest on your existing credit cards, switch them as soon as possible to a card with a lengthy interest- free period on balance transfers.
Barclaycard Platinum Card, for example, is offering a generous 20 months interest free on balance transfers. If you transferred a balance of £1,000 onto this card, you'd save almost £400 compared to paying the average interest of 19.1 per cent on a credit card over the same period.
Please note: Any rates or deals mentioned in this article were available at the time of writing. Click on a highlighted product and apply direct.
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Contact moneysupermarket.com at Moneysupermarket House, St David's Park, Ewloe, Flintshire, CH5 3UZ. © Moneysupermarket.com Ltd 2011
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