Are UK wages keeping up with the cost of living?

By Bianca Jashnani

The cost of living has been on the rise since early 2021, and inflation reached its highest recorded level in January 2022 since 1992. Due to this the affordability of goods and service of households have been affected. 

According to the Office for National Statistics, growth in regular pay excluding bonuses fell by 1% in the three months to January, this has been the fastest rate of fall in average wages since 2014.  

With energy bills and the cost of living escalating and average wages falling, there are a lot of concerns over “cost-of-living squeeze”.

What is affecting the cost of living?

“A lot of factors are affecting my cost of living. Most recently the inflation of everything has affected it. Rail and tube prices have gone up, electricity and gas bills are rising a lot from April,” said Miri Lawerence, 35, part time support worker. 

“I get paid a little more than minimum wage, but it is still not enough. I live in Central London, getting a place there itself is very expensive, but because everything is accessible for me, I prefer to live here and save time travelling if not money.” 

Lawrence added that by the time she pays her bills, she will have “nothing left” for herself. 

From the 1st of March, the travel fares saw a 3.8% increase, this has been the biggest hike rate in nine years. Not only this, but it is expected that people will be paying ￡693 more on their gas and electricity bill from April. 

“I think the inflation is ridiculous, have I not been paying enough money already that the government wants more?,” said Pratibha Gupta, 43, mom of two.

“Rising interest rates are making our mortgage payments more expensive too. I come to London for work every two days and I am paying more for travelling too? Of course it doesn’t seem like a big number because the tube has only gone up by 10p per trip, but if you see all year, there is quite a difference.”

Is Russia and Ukraine affecting inflation?

“I think Russia invading Ukraine has made things worse for us,” said Natalia Atefancova, 26, full time retail worker at Selfridges. 

“We are already paying so much for gas and the world is a bit reliant on Russia for oil imports. But because of the war and cutting down of oil from Russia there is less oil and the prices are high and I am sure, the alternatives will be even more expensive. 

“We can’t survive without gas in this country, we need it everywhere, in our houses, offices and schools, and mostly every place is centrally heated”  

Even though Russia is the third largest oil producing country in the world, 8% of the UK’s oil demand and 5% gas demand is met by them . If Russia halts the oil and gas  export, the prices will rise even more. 

People are worried that the gas and oil prices will hike even more in the near future and the cost of living will be very difficult to keep up with no increase in the average wages.