8th September, 2022, LONDON –
With the impact of the cost of living crisis becoming ever more apparent, new research from personal finance comparison site finder.com investigates how the prices of common commodities in the UK have changed over the last 30 years, with many sitting above the growth in average salaries and inflation.
The historical data revealed that since 1992, house prices have risen by a whopping 438%, which is over 4.5 times the rate of inflation (93%) and 2.5 times larger than the growth in average salaries (160%). Rental prices have increased by a comparatively small rate of 142% in the last 30 years.
Not only have house prices soared, but the cost of everyday items are also sitting far higher than inflation and annual salaries. Petrol prices have surged by 338% and stamps are 296% more expensive than they were back in 1992.
The cost of a pint of beer has also risen faster than average salaries have grown, with a growth in price of 181%. Separate research from finder.com found that the average price of a pint in the UK is now £4.19 and Londoners face paying £5.99.
Growing costs of everyday items are dwarfing annual salary increases in 2022
Price changes within the last year were also calculated as part of the study. Inflation is currently at its highest point in the past 30 years with the majority of common items in the UK soaring in price this year. Many outstrip the current inflation rate (8%) and almost all outstrip the growth in average salaries in 2022 (4%).
The commodity which grew the most in price over the last year was electricity, growing by a huge 39% since 2021, over 9 times salary growth. This was closely followed by the price of petrol which grew by 30% over the last year – 7 times above salary growth. Even the cost of milk has risen by 20%.
The only thing in the study that didn’t see more growth than the average salary was rent, which has also increased by an average of 4% in 2022.
To see the research in full visit: https://www.finder.com/uk/historical-price-tracker
Commenting on the findings, Michelle Stevens, banking, finances and mortgages specialist at finder.com said:
“It’s clear from this data that the UK is experiencing extremely tough times when it comes to our personal finances, and the worry is that many Brits will not have sufficient funds to cope with further price increases.
“The significant increase in house prices compared with a minimal rise in annual salaries is indicative of a property market which could be set to unravel, with many first-time buyers choosing to wait on the sidelines as the economy looks set to enter a recession.
“On the other hand, the comparatively smaller increase in rental prices, which also matches the growth in average annual salary, means that it could make more financial sense in the current market to rent rather than purchase. The situation is only exacerbated further by the increasing cost of everyday items making it harder for British households to put any money aside to save month-on-month.
“It’s now more important than ever for households to make those small changes which can help stretch their salaries further. Here are a few steps we recommend taking:
Reconsider your existing subscriptions
“It’s worth taking an inventory of any existing subscriptions you might be paying for each month, and consider whether or not you really need them. If you do have multiple subscriptions these costs can really add up, and just cutting back on one or two could save you a significant amount over time. In fact, our recent research found that 1 in 5 Brits would cancel their TV/film subscriptions in order to save some extra money.
Set yourself a realistic budget
“There are now multiple finance apps available which can analyse your current expenditure, and help create realistic budgets to assist in saving. Making these small changes to your spending habits is a really effective way to put more money aside each month.
Renegotiate with your current service providers
“Do your research, and see what alternative suppliers are offering for the services you currently use. You’ll often find that rates will go up if you’re an existing customer for too long, and new providers will have much more competitive offers. Make sure you call your current provider and try haggling for a better rate. If they won’t offer you a better deal, make the switch.”
Using data from the below sources, Finder worked out the percentage increases in the prices of several common items and compared them to the inflation rate over time. Data sources: Land Registry, ONS, Royal Mail and House of Commons Library
The information in this release is accurate as of the date published, but rates, fees and other product features may have changed. Please see updated product information on finder.com's review pages for the current correct values.
finder.com is a personal finance website, which helps consumers compare products online so they can make better informed decisions. Consumers can visit the website to compare utilities, mortgages, credit cards, insurance products, shopping voucher codes, and so much more before choosing the option that best suits their needs.
Best of all, finder.com is completely free to use. We’re not a bank or insurer, nor are we owned by one, and we are not a product issuer or a credit provider. We’re not affiliated with any one institution or outlet, so it’s genuine advice from a team of experts who care about helping you find better.
finder.com launched in the UK in February 2017 and is privately owned and self-funded by two Australian entrepreneurs – Fred Schebesta and Frank Restuccia – who successfully grew finder.com.au to be Australia's most visited personal finance website (Source: Experian Hitwise).