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Every year, household bills and items tend to increase slightly. However, right now, we are facing some of the biggest increases in household bills and taxes in years. April saw energy bills increase by an average of 50%, National Insurance contributions rise by 1.25%, an annual increase in council tax and travel costs rising by 3.8%. This means that over the next 6-12 months, many people are likely to have to cut their spending to afford the newly inflated cost of living.
During this difficult time, there are some tips you could share with your employees to help them reduce their outgoings and these small changes can make a big difference.
Additionally, Ian Bird of Secondsight will be hosting a webinar on Monday 25 April at 2pm, showcasing how employers can support their people with the cost of living crisis.
The big switch off
We know that employees will have individual circumstances which means the cost of living will impact them in different and unique ways. Some will have already taken measures to reduce their outgoings in a variety of ways, whereas others may still be looking for ways to do this. There are several ways employees can potentially save money, from switching off lights when not in use, , including when leaving the house,switching to using energy efficient lightbulbs, which can help save money in the longer run, even though the initial cost may be higher. Switching off household appliances, whether TVs, kettles or toasters can also help save on bills.
One degree cooler
According to uSwitch, if you turn down your thermostat by just one degree, you could save £80 a year on your heating bill. Highlight this information to your people and they may want to try putting on an extra layer or get under a blanket and see how much they could save.
Employees could also look to do their washing on a cooler wash and only put it on when they have a full load, as well as approach their energy company provider and speak to them about moving to a different tariff, as they may not be on the most cost-effective one for them.
Think about the food shop
With inflation reaching a 30-year high, this has in turn affected food prices which have increased by 1.5%. Most people have seen a significant rise in food prices but with some smart shopping there are ways employees can reduce their weekly bill. Firstly, plan ahead. This includes creating a weekly meal plan, writing a list of what’s needed and looking for any current offers which could be of benefit. They can also save money by shopping for seasonal items as these tend to be cheaper. Remember that convenience foods such as ready meals are usually more expensive.
Check their benefits
It is worth reminding your people about the employee benefits on offer in your workplace. Some benefits might include discount vouchers for popular retail chains including big supermarkets, which could save them hundreds a year. In addition, you may have travel discounts or loans to help with commuting costs or a cycle to work scheme which could reduce your fuel costs. Remind your employees of all of the great benefits you offer.
Help available from the government
To help households struggling with the cost of living crisis, the government has announced people could claim up to £350. This support includes:
- A £200 energy rebate in October. This means every eligible household will get an upfront £200 discount on their energy bill in October, however, this will need to be paid back in instalments from April next year.
- A £150 council tax rebate in April to all households living in council tax bands A-D. This will not need to be paid back.
If your people are really struggling with the increase in their cost of living, they do not have to suffer in silence. Citizen’s Advice offers free and confidential advice and can help them get the right support. There is also Money Helper which is government-backed and offers free impartial help with money problems.