But there are ways every household in Britain could offset the squeeze to some extent by making their budget go further.
In fact, most homes could save potentially thousands of pounds just by switching their bills to the best deals on the market.
In this video we’re going to show you five simple ways to save over £1,500 in less than an hour.
Gas and electricity
The difference between the best online tariff and the average standard tariff bill is a whopping £303 a year. But in this country we hardly ever switch and, when we do, we tend to let doorstep energy sellers sign us up to new products that may not be the best for us.
So that’s a potential £300 shaved off your household bills every year, what else can we cut?
If you let your car insurance auto-renew each year then you’re very likely paying too much. The average annual saving drivers make by comparing car insurance through moneysupermarket.com is £237 a year.
It can take less than three minutes to get a quote and that brings our total to £540.
It’s the same with home insurance, by auto-renewing, you’re wasting potential hundreds of pounds.
The average saving made by comparing cover is £127 – so we’re up to £667.
Do you have any outstanding loans? The average rate on £7,500 over five years is 10.58%, but the cheapest rate available at the moment is 7.6%. That means moving to a better rate could save you £600 a year.
Only people with a top credit score will get that market-leading rate, but if you can improve the rate you’re paying you could save hundreds of pounds a year.
And that brings us to £1,267 in savings. Now, do you have a credit card?
If you have an outstanding balance on a credit card, it’s worth seeing if you could qualify for an interest-free balance transfer deal. Moving to one of the market-leading options would give you up to 16 months at 0%.
If you’ve got £2,000 worth of credit card debt, that’s going to save you £258 a year, bringing the total saved to £1,525.
That’s an after-tax boost of more than £1,500, and many families will be able to save even more.