Rising living costs are now commonplace as Britons continuously battle against the fierce tide of economic instability in the UK. It might come as no surprise to many that costs just keep on increasing.
Economic gloom and doom is burrowing deeper into the empty pockets of the nation as many struggle to cover the costs of everyday essentials. If you feel that your money just doesn’t seem to stretch as far anymore, here are a few reasons why this may be the case:
Banks are now charging customers the highest overdraft rates since records began. Whilst it’s not uncommon for banks to charge customers for the privilege of dipping into an arranged overdraft and even more for an unarranged overdraft, it is not typical for rates to be nearly 40 times the base rate!
The average arranged overdraft rate across high street banks and lenders now stands at 19.52%.
With the base rate standing at an historic all time low of 0.5% for over three years, the overdraft rate is almost 40 times higher.
Customers with a £1,000 overdraft for a year would have to fork out £195 before any of the actual debt was paid off. In addition to this, official figures from the Bank of England show that overdraft rates are steadily increasing.
Back in March 2009, when the base rate was initially slashed to 0.5%, the average authorised overdraft rate was just 18.62%.
The rate has continuously increased over the last three years, reaching a peak in February and further to the last available figures in March to 19.52%.
This is the highest-level recorded since 1995. To make matters worse, the ludicrously low base rate means that savers have also been hit with the worst rates in history.
A growing number of people are turning to overdraft facilities to get by and are left suffering with extortionate overdraft fees as a result.
Having a mortgage in the UK has becoming increasingly expensive thanks to the recession. As buyers have been pushed out of the market and forced to rent, the demand for rent has soared. With limited availability, landlords are free to charge higher rates. This dramatically pushed up the average monthly cost of rent to a record high late last year.
In some regions across the country, getting a mortgage is cheaper than renting.
Housing, rent, utilities, transport and other basic everyday essentials are all rising, however, so is the cost of fun.
The cost of fun and leisure activities is sharply rising, according to new figures. A review of leisure spending found that the cost of ten out of 11 activities has increased far quicker than the rate of inflation.
The average price of a Premier League football match ticket, for example, has shot up by a massive 184% compared to two years ago. The average Premier League ticket will currently set fans back by £48.90.
Research from Halifax bank found that gym fees were also up by 48% in the last decade. A family trip to the cinema is 46% more expensive today than ten years ago.
However, in comparison, gardening costs have increased by just 17%, making it a popular leisure activity for many.
It’s not just fun that Brits are missing out on! DIY spending has fallen to the lowest level for 15 years.
According to a recent Lloyds TSB report, the continuous squeeze on household finances and the stagnant housing market has left many cash-strapped homeowners unable to make improvements or carry out essential maintenance.
The toxic combination of rising unemployment, over-inflated fees and high living costs has quickly led pounds to turn into pennies…..with poverty next on the cards.
Research from the Joseph Rowntree Foundation shows that current changes to the job market in the UK would increase poverty levels by 2020. In effect, as the economic gloom worsens and the outlook for jobs becomes strained even further, people could fall into the trap of unemployment which could increase poverty levels.
The report highlighted that gender remains a significant issue in terms of contributing towards lower standards of living. Shockingly, among the lowest paid 30% of workers, a staggering 65% of them are women.
Unemployment in the UK is a growing problem which is now nearing the 3 million mark. Industry experts have suggested that some areas of the country will see levels continue to rise for the next five years.
The most recent figures show a slight improvement to unemployment levels, falling by 35,000 to 2.65 million between December 2011 and February 2012. This was the first dip in levels for five months. However, the number of women out of work was at the highest level since records began in 1987.
Research from the Centre for Economics and Business Research (CEBR) suggested that the total jobless rate could hit 10.7% by 2012. It is currently at 8.3%.