The cost of living crisis – seven ways to save

Prices are increasing everywhere – from food to fuel to personal finance. Find out what the cost of living crisis is and how you can save money.

amy smith
Amy Smith
Updated 28 February 2022  | 3 min read

Prices are on the rise and you might find your earnings struggling to keep up. But there are some things you can do to make the most of your budget.

How can I save money given the increasing cost of living?

Here are seven ways you can save money during the cost of living crisis:

1. Insurance

If you let your car – or home, van or bike – insurance renew, you could be missing out on some serious savings or other benefits.

A quick comparison could help you find a better deal. You might even spot an offer – like our £250 free car or home excess protection.^

You could also save more by paying annually and removing optional extras you don’t need.

More tips for cheaper car insurance >

^Car cover excludes breakdown, windscreen & glass replacement/repair. Home cover excludes accidental loss or damage. T&Cs apply.

2. Broadband

You might be paying over the odds for your broadband, particularly if you’ve been with the same provider for a while.

If you’re able to leave your current deal, compare prices or ask your current provider to see if you could find something better. Paying for your TV, phone and internet in one bundle and not being afraid to haggle could also help you save money.

More broadband tips >

3. Mortgages

The Base Rate (the official borrowing yardstick) rose from 0.25% to 0.5% in February which means variable mortgage rates are highly likely to increase.

If you’re on a standard variable rate or your fixed rate mortgage ends soon you’ll likely move to a pricier deal. You might be able to save money by checking whether you’re able to switch to another deal or lender (called remortgaging).

More mortgage tips >

4. Credit cards

Credit card bills aren’t technically on the rise, but paying interest on top of what you owe can eat into your income.

For a small fee, you could move to a 0% interest balance transfer card. Use an eligibility checker to see what cards you’ll likely be accepted for and if you find one that's right for you, use the interest free period to clear the debt.

More credit cards tips >

5. Energy

It’s difficult to find reasonably-priced gas and electricity deals at the moment. But you can reduce your bill by cutting down your energy usage. For example, you could save around £57.40 a year by not leaving some common appliances on standby.[1]

You might also qualify for energy grants or benefits from the government, your energy supplier or local council.

More energy saving tips >

6. Food

The price of everyday grocery essentials is rising and the boss of Tesco recently warned they could rise by another 5% soon. Here are some tips to save:

  • Batch cook – there are plenty of delicious cheap and easy batch recipes online. Special offers can help your budget stretch
  • Plan your meals – then you are less likely to buy things you won’t use that you need to throw out
  • Try a brand level lower – Moving to supermarket own brands can save you money at the till and some people don’t notice the difference. It’s a matter of taste but why not try it?
  • Don’t shop hungry – then you risk buying way too much
  • Don’t panic buy – adding to the demand increases costs further, wastage is more likely and it prevents other people getting products they need

7. Still struggling financially? Get help from charities

Get advice – there’s no shame in reaching out for support. StepChange, Turn2us, British Red Cross or Mind are just a few organisations that could help you, and they don’t charge either.

What is the cost of living crisis?

Since late 2021, costs have been rising across multiple products and bills that most of us have. This means your energy bills, insurance premiums and weekly shops might be costing you more than they previously did.

That has created rising inflation (how much things cost) which sadly for many people has exceeded wage rises, which puts a huge strain on people’s finances. To make matters worse, there are also increases for many people in National Insurance payments coming in April.

Why are prices increasing?

The cost of gas has skyrocketed recently, which has had a knock-on effect for energy prices, as well as other household bills.

Many global supply chains were also disrupted during the Covid-19 pandemic, alongside increased shipping costs, which has led to higher prices for things such as construction materials, food, vehicles and electrical appliances.

^Car insurance: Up to £250 refunded after claim settled. Car insurance purchases only. Excludes breakdown, windscreen and glass repair/replacement. Full T&Cs apply

Home insurance: UK residents and home insurance purchases only. Excess refunded after claim settled. Excludes accidental loss or damage claims made on your home insurance. Full T&Cs apply.

[1]Based on the Department for Business, Energy & Industrial Strategy (BEIS) 2020 cost of standard electricity in the UK (17.4p/kWh or 0.0174p/Wh). Wattages sourced from industry averages and/or product specifications. Example: Xbox One = 10 watts * 0.0174p/Wh = 0.174p/Wh x 8760 hours/year = 1524.24p/year = £15.24/year