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The Cost-of-Living Crisis

The Cost-of-Living Crisis

We’ve all heard of the cost-of-living crisis, and it’s likely that we’ve all experienced it, too. From inflated gas and electricity prices to extortionate fuel costs, no one’s monthly paycheque is stretching quite as far as it used to.

People who have never had to worry about finances before are suddenly wondering how they’re going to make ends meet until the next payday. The financial situation of British citizens has never been so unstable, and more people are struggling than not, in more ways than one. Financial wellbeing and mental wellbeing are directly linked, with financial insecurity invoking fear, anxiety, and depression in those who experience it.

Read on to discover more about the cost-of-living crisis.

What is the Cost-of-Living Crisis 2022?

The “cost-of-living crisis” describes the decline in disposable incomes. Due to inflation and tax increases, the majority of a person’s paycheque is likely to go towards the necessities, leaving almost zero room for disposable monies. In many cases, a person’s paycheque won’t even stretch far enough to cover all the costs that are needed to live.

Why is there a Cost-of-Living Crisis in the UK in 2022?

Unfortunately, the cost-of-living crisis has been a long time coming, thanks to the Coronavirus pandemic that resulted in multiple national lockdowns. Consequently, the economy was essentially forced to reset, building up to the inflation we see today of 9.4%. Despite this, lockdown isn’t solely responsible for this increase in prices, as Brexit has also meant that the country is having to pay more for imported goods from the EU. It’s for this reason that you’ll likely have noticed the price of your weekly food shop skyrocketing in recent months.

Furthermore, fuel prices are currently higher than they ever have been, with the average cost of unleaded petrol in the UK sitting at 182.11 pence per litre. Meanwhile, the price of gas and electricity is set to increase by £800 per year, and the cost of National Insurance has risen by 1.25%.

Amid all these increases, wages are stagnating. The national living wage was recently increased to £9.50 per hour; however, this isn’t nearly enough to compensate for the ongoing inflation.

The Cost-of-Living Crisis Explained

In short, the cost-of-living crisis is a situation in which the cost of everyday essentials, such as bills and groceries, are rising at a pace that the average household income can’t keep up with.

The Cost-of-Living Crisis Latest

The latest on the cost-of-living crisis has seen fuel and energy companies reach record profits. Meanwhile, everyday workers are left feeling exhausted and scared, as they’re putting themselves through extensive overtime and are still struggling to make ends meet.

What the Government is Doing About the UK Cost-of-Living Crisis

If you’re one of the many people struggling to navigate their way through the cost-of-living crisis, thankfully, the government has announced various cost-of-living measures. These include:

  • One-off payments of £150 for disabled people in receipt of disability benefits
  • One-off payments of £300 to pensioners receiving the Winter Fuel Payment
  • Giving two one-off payments amounting to £650 to those in receipt of benefits
  • Replacing a former £200 energy loan with a one-off grant of £400 to be paid to everyone in October
  • Adding another £500k to the Household Support Fund

Previously, the spring statement detailed other measures to combat the cost-of-living pressures, such as:

  • Increasing the national insurance threshold
  • Decreasing the basic rate of income tax for 2024
  • Extending the Household Support Fund
  • Cutting fuel duty by 5p in the pound

Furthermore, households that fall into the A-D council tax bracket received a £150 rebate.

Where to Get Help

For many people, these allowances made by the government still aren’t enough to handle the rising cost of living, meaning that they’re forced to seek help elsewhere. This aid can come in the form of energy and water bill assistance, support with rent, and council tax relief.

For instance, the government has available schemes, such as the Warm Home Discount and the Winter Fuel Payment, in which people can apply for assistance with their energy bills.

Similarly, the vast majority of local water suppliers have schemes available to help people pay their bills. Therefore, this is also worth looking into if you’re struggling with water bill payments.

Anyone struggling to pay their rent may also be eligible to claim universal credit, which has replaced housing benefits. Even if you’re already claiming benefits, but they don’t cover your housing costs, you may be entitled to a discretionary housing payment.

On top of this, those struggling to pay their council tax may be entitled to council tax relief, whereby a council tax reduction can be applied for via the government website.

Those who are struggling to buy essentials, such as food, may also be entitled to help from their local council. Similarly, The Trussell Trust hosts food banks throughout the country.

What Muslim Aid is Doing to Combat the Cost-of-Living Crisis in the UK this 2022

Here at Muslim Aid, we don’t wish to see anyone struggling, which is why we’re also doing our bit to help. We plan to work through partners to provide cash grants and food to those affected by the UK cost-of-living crisis.

We are a faith-based British international charity that provides help to people who are victims of natural disasters or conflict or suffering from poverty, hunger, disease, homelessness, injustice, deprivation or lack of skills and economic opportunities.

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