Cost of living statistics UK: 2024

The cost of living crisis and efforts to contain inflation have had a knock-on effect on banking, including higher borrowing costs, but better savings rates. Finder conducted research to analyse the situation in the UK, and we look at the latest cost of living statistics below.

Cost of living statistics: Highlights

• In January 2024, 6 in 10 adults (62%) in Great Britain said they were spending less on non-essentials because of increases in the cost of living.
• In January 2024, around half (52%) of adults said their cost of living had risen compared with a month ago.
• Around 4 in 10 adults (41%) who pay energy bills said it was difficult to afford them.
• More than a third of adults (37%) are finding it very or somewhat difficult to afford their rent or mortgage payments.

Why is there a cost of living crisis?

The cost of living crisis is a result of increasing prices for goods and services across the UK. The pandemic, Brexit and the Ukraine conflict all contributed to increasing prices for fossil fuels, food and other commodities and services. Inflation peaked in October 2022 at 11.1%.

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Where have Brits seen the cost of living increase?

In August 2023, almost all UK households (97%) reported an increase in their gas and electricity bills which contributed to the overall cost of living. Over two-thirds (69%) of households also saw a cost of living increase in their rent or mortgage payments.

Other common areas where costs increased were the price of food shop, where 40% saw a rise, and the price of fuel, where a quarter of households had reported increased costs. A fifth of Brits (19%) also saw the price of public transport going up, while one in ten households had to deal with rising cost of childcare or other care.

Area	Percentage of UK households
Gas or electricity bills	97%
Rent or mortgage	69%
Food shop	40%
Fuel	25%
Public transport	19%
Childcare/care costs	10%

How are Brits responding to the cost of living crisis?

A survey conducted by Finder revealed that 96% of Brits said they would give up at least one good or service to save money in 2022, due to the cost of living crisis.

The most common sacrifice was eating out, with over 22 million (42%) Brits saving money by avoiding restaurants. Takeaways were in second place with 40%. Tied for third place were shopping and nights out with 31%.

Almost 2 in 3 Brits (65%) are spending less on non-essentials in 2023 while almost half (47%) are shopping around more to save money in 2023, according to external research.

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Case study: The cost of living crisis has impacted Tracey's finances

Tracey Greyvenstein

The cost of living increases have negatively affected me financially and most price increases just cannot be justified. I have not been able to pay my mortgage, and some of my bills.

The increased cost in energy is crippling, with my energy bill going from £80 per month to £200 per month and I do not have any heating installed on my property.

I am not happy with how much I have saved. I have had to use some of it to pay for things like car insurance, tyres, MOTs, electricity bills and repairs.

Cost of living: spending statistics

As of August 2023, around two-fifths (62%) of Brits were looking to reduce their overall outgoings by spending less on non-essential items. Half of people in the UK (51%) are also shopping around more often to try and find better deals.

Other changes in spending habits included using less fuel (44%), spending less on food and essentials (41%) and, perhaps worryingly, one-third (33%) of Brits who were using their savings to deal with the cost of living crisis.

Cost of living: housing statistics

Another big impact of the cost of living crisis is on housing affordability. As of August 2023, over two-thirds (36%) of Brits had found it somewhat or very difficult to afford their rent or mortgage payments.

This is not surprising as private rental prices were up 5.3% year-on-year in July 2023, the biggest annual change since the record began in January 2016.

This was even higher in London, where rental prices increased by 5.5% year-on-year, the highest annual percentage change since records began in January 2006.

For those who are looking to buy rather than rent, house prices also saw an increase of 1.7% in the year to July 2023 and the average mortgage rate for a 2-year fix with a 15% deposit was 6.4%.

Cost of living: food statistics

In August 2023, around half (51%) of UK adults reported spending more money than usual to get their usual weekly food shop. As a comparison, in October 2021, less than 1 in 5 (18%) adults said they were spending more than usual on the same food.

The CPIH inflation rate for food prices was reported to be a whopping 17.4% in June 2023, after reaching 19.2% in March 2023. The CPIH inflation rate for restaurants and cafes remained high at 9.1% in June 2023, after hitting a peak of 11.4% in February 2023.

When did the cost of living crisis start?

The cost of living crisis started in late 2021 and continues in 2023. Its effects were felt strongly in 2022. The UK experienced high inflation before, such as in the 1990s, but the term “cost of living crisis” has only been widely used in the current inflationary period.

The search term “cost of living crisis” peaked in August 2022, with negligible search volume in the last 10 years.

How does inflation affect incomes?

Real income measures the value of one’s income adjusted for inflation to reflect the purchasing power of an individual, since inflation decreases the value of money.

Real incomes in the UK have fallen since the start of the pandemic. The real income per capita in 2019 was £28,118. This level has not been equalled as of yet, with the real income per capita in 2022 estimated at £27,256.

What caused the cost of living crisis?

The cost of living crisis was caused by the rise in prices in the main components of the CPI including owner-occupiers’ housing costs (CPIH) such as gas, electricity and food.

Gas prices have been the main driver of the cost of living crisis, with annual inflation peaking at 129% in January 2023. Electricity had the second-highest annual inflation at 67% in the same period.

Food and non-alcoholic beverages also peaked in January 2023 with an annual inflation rate of 17%. Motor fuels have reached their inflation rate peak in June 2022 at 44%. In January 2023, the annual inflation rate for motor fuels fell to 8%.

Who is most affected by the cost of living crisis?

The rise in prices is not affecting everyone equally. Certain income groups experience the cost of living crisis more strongly than others. Low-income households spend around 27% of their total expenditure on gas and electricity, compared to only 20% spent by high-income households on the same category.

Low-income households also spend proportionally more on food and non-alcoholic beverages, with 16% of their expenditure dedicated to this category compared to only 9% for high-income households.

Since low-income households spend a higher portion of their total expenditure on the food and fuel categories, they experience a higher inflation rate than high-income households.

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Matt Mckenna
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