Official figures from the Office for National Statistics show that inflation reached 5.4% in December 2021, its highest point for nearly three decades.

This, compounded with tax freezes and a rise in the energy price cap in April, means that Britons could be faced with a difficult cost-of-living squeeze this year.

As such, here are 10 ways you could reduce your household expenditure to help save money as prices rise.

1. Use comparison sites for bills

The current European energy crisis could lead to much higher bills come April, so finding a cheaper alternative could save you hundreds of pounds over the course of the year.

Luckily, there’s no easier way to find and compare your options than with comparison sites, which often list the suppliers and their offers in an easy-to-understand way. 

Comparison sites could also help you find a better deal on your gas, home insurance, car insurance, and more. It is often worth using these sites as you come to the end of your deal, as the renewal deals you may be offered are often not the best on the market.

2. Insulate your home

On the topic of rising energy prices, insulating your home can help to reduce your heating bill. The Guardian expect gas and electricity bills to increase by about 50%, or £2,000 on average, in April 2022. For those who run a business, own larger properties, or live in colder parts of the country, it could be much more.

Insulating your home could be key in mitigating the impact of rising energy bills. It can be done in many ways, from installing roof insulation, which prevents the heat escaping through your loft, to draught-proofing your doors and windows.

Preventing the heat from escaping your home may allow you to turn the heating off overnight or set it on a timer to reheat your home a couple of times a day. Insulation also helps keep your house cooler in summer.

By cutting down the time that your heating is on, and by reducing the need for fans and other cooling equipment in the summer, you might save hundreds of pounds in wasted electricity or gas.

3. Pay off credit card debt

Credit cards often charge high interest, so if you only pay the minimum each month, you may increase what you owe significantly, especially if left for a long time. Paying off your debt in full will stop the amount you owe from creeping up.

For some payments that you’d usually put on a credit card, especially at times when prices are rising quickly, consider using a debit card or PayPal to avoid borrowing.

4. Make the most of tax-efficient options and relief

There are several different ways to be more tax-efficient with your money. For one, saving or investing with an ISA means that any interest or returns you get are tax-free, and you can save up to £20,000 each year across your ISA accounts.

Secondly, if you are a higher- or additional-rate taxpayer, you can manually claim tax relief above the base rate (20%) on your pension contributions and charity donations made through Gift Aid.

Read our previous article on tax relief to find out more.

5. Cancel unnecessary direct debits

Direct debit payments are great for convenience, but can be easily forgotten. Make sure to re-evaluate your monthly (and less frequent) payments and stop paying for services you no longer use.

Lots of small monthly payments may not look like much individually, but they can really add up without you realising. Some of the more costly payments that you might not be making the most of are things like gym memberships or meal kits.

Also, be careful not to fall into the trap of not cancelling because you “might need it one day”. Most direct debits are easy to reinstate, so avoiding the unnecessary payments until you use it again just makes sense.

6. Be on the lookout for discount codes, especially on bigger purchases

When shopping online, especially for larger purchases like furniture, clothing, or technology, have a hunt around for any available discount codes.

With a bit of digging, you can sometimes find codes online that knock 10% or 20% off the price, which can be a significant amount of money for expensive items.

7. Consider ditching your car more often

Your car is an expensive piece of equipment. Even if you ignore the amount it cost to buy, you still probably pay several hundred pounds a year on insurance, maintenance, petrol, and taxes, just for owning a vehicle.

Plus, a planned rise in Vehicle Excise Duty and the implementation of more “clean air zones” across the country in 2022 means that the cost could be getting even higher for petrol- and diesel-run cars.

By walking or taking public transport more often, you could save on fuel and reduce the necessity for regular maintenance. If you live in an area with good public transport links, selling your car could save you thousands on a yearly basis.

8. Shop smart and avoid overspending

A 2019 study published in the Mirror shows that Brits are more likely to overspend on their weekly shop if they visit the store on an empty stomach. The average amount that Brits overspend on food shopping a year totals almost £600 per person.

By sticking to a shopping list and avoiding the supermarket when hungry, you could be both spending less money and wasting less food.

9. Try to recycle within your own home

The next time you think you need to upgrade or replace a household item, have a think about what you can use it for before throwing it away.

If it’s electronic, try to fix it before getting a new one. Google or YouTube can be your best friends here, as someone out there has almost certainly had the same problem, and you might be surprised how easy a fix could be.

If not, think about the different ways you could use the item before parting with it and buying a replacement that can do similar things. For example, an old games console that has a broken disc reader can instead be used as a media player by downloading apps like Netflix and Prime Video.

10. Work with a financial planner

Possibly the best way to ensure your finances are protected in the face of high inflation is to work with a professional.

We can factor in the impact of inflation with any plans or budgets we make on your behalf, all while ensuring that your wealth is protected.

To find out more about how we could help you or if you have any questions about our services, email or call us at 0207 808 4120.

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