Family finances are being stretched to breaking point. The perfect storm of price and bill hikes, combined with looming tax increases, has left households on the brink of the largest spending cut in a decade.
The inflation rate is predicted to rise to as high as 5% next year. This will be countered by the fact that few workers will get large enough pay raises.
This means that the pound they have in their pockets will not go as far.
Energy bills could soon rocket by an eye-watering £400 for the average household, after gas prices went through the roof.
Despite a 12-year fuel duty freeze, petrol prices have reached a new record high.
Christmas is approaching and food prices are on the rise.
In addition, if interest rates rise in the future, homeowners who are not on fixed-rate mortgages could see an increase in their mortgage costs.
The National Insurance increase for workers in April and the freezing of income tax bands will add more pressure to already overburdened budgets.
Rishi Sunak (pictured), did not mention the word “pensioner” in his hour-long Budget speech yesterday
However, of all households, few are more difficult than the millions of pensioners with fixed incomes.
Rishi Sunak, however, failed to mention the term ‘pensioner” in his hour-long Budget speech yesterday.
It’s likely that retirees will feel completely abandoned upon their first day of retirement.
They had nothing in the Budget. They won’t be helped by Universal Credit reforms or the increase in the living-wage.
However, it is well-known that rising prices almost always affect pensioners.
How the Budget will impact your household depends on your total income (listed above, horizontally) or family arrangement (listed below, vertically).
This is because for those aged 65 and above, food and energy costs represent a far bigger proportion of their typical household spending – largely because they spend more time at home and so need the heating on more.
According to Aviva insurance, these bills account approximately 18% of a typical month’s budget compared to 11% for those below 30.
So it is a particularly scary time for the millions of people who rely on the state pension to make ends meet – especially the poorest who have no other income.
However, the triple-lock promise has been canceled and the state pension is expected to rise by only 3.1% in April.
This might sound generous on the surface, but it works out at just a meagre £5.55 a week rise in the full new state pension to £185.15.
It won’t even come close to matching rising inflation.
VICTORIA BISHOFF: This Budget was bitterly disappointing for millions of pensioners who desperately needed some assurance that they were not forgotten. They have been left out in the cold – quite literally
As a percentage of pre-retirement take home pay, the state pension is among the most inefficient in the developed world.
It would have risen by 8 percent if it had risen in line to earnings.
This was a missed opportunity for pensioners to get a real boost and help keep their income in line with the increasing cost of living.
All except the most vulnerable have lost their TV licenses.
However, the Chancellor couldn’t find the will within himself to increase any vital benefits that help the most vulnerable pensioners pay their energy bills, such the winter fuel payment, cold-weather payment, or warm homes discount.
A rising price means that private pension pots are at greater risk of running dry faster.
Savers have already been through more than a decade with rock-bottom rates, and there isn’t a single account that can match, let alone beat inflation.
Even Rishi’s eagerly awaited green bond, the ‘world’ first, was a disappointment. It offered 0.65 percent interest to savers who held their cash for three consecutive years.
Investing is now the only way to prevent savings from being eroded by inflation – but this may involve taking greater risks than many feel comfortable with.
The Chancellor can’t please everyone. The Government is under pressure to tighten their belts.
This Budget was a bitter disappointment for millions of pensioners who needed some assurance that they were not forgotten.
They have been left out in the cold – quite literally.