Rising cost of living places Harrogate households on crisis alert

Inflation has reached a near-30-year high meaning everyone is being forced to pay a lot more for things like gas and electric, food, rent and fuel.

Some people are having to choose between heating or eating, and many parents report going without food to ensure their children have enough. People are also falling into arrears, or getting into debt. Unfortunately, the situation isn’t going to get easier, despite measures introduced by the Chancellor of the Exchequer Rishi Sunak last week.

In April, the energy price cap will go up 54% for approximately 22 million customers. Those on default tariffs paying by direct debit will see bills go from £1,277 to £1,971 per year while prepayment customers will see an increase of £708 from £1,309 to £2,017. Harrogate Borough Council tax will go up 1.99% while North Yorkshire County Council tax will increase 3.99%, which includes a 2% social care precept.

Other bills are also increasing - Vodafone has announced price rises of 8.2%, while BT bills will rise by 9.3% (unless you’re on BT’s Home Essentials, Basic and Phone Saver packages), as will EE contracts.

Which? found the eight biggest UK supermarkets were charging up to 9% more for their ranges in December 2021 than they were in January 2021, with the average basket going up 3.4% over this period.

Petrol and diesel prices have soared to record new levels due to global supply issues, market uncertainty and Russia’s invasion of Ukraine. And last week, we reported that rental prices had reached new heights due to a shortage of available properties, with Guy Wigginton, director of R&W Lettings in Harrogate, saying: “Prices are sky high. There’s not much change from £1,000 for a three-bed semi, and even for a two-bed terrace, renters are looking at £750-plus a month. For a detached four-bed, you’re talking £2,500 a month in rent.”

This is all in addition to National Insurance rates rising from 12% to 13.25% for one year from April 6 - to raise funds which will be ring-fenced for health and social care.

In his spring statement last week, the Mr Sunak announced the rise would still go ahead, but that the earnings threshold will go up to £12,570 from July to mitigate the increasing cost of living - the good news is the new National Insurance plan means the average Harrogate worker will be paying less per year from July.

Figures from the Office for National Statistics show that the median salary for full-time workers living in Harrogate was £32,778 in 2021. Currently, employees pay National Insurance of 12% on their annual earnings over £9,568, meaning a worker on this wage would pay £2,785 - around £232 per month. This means the average full-time Harrogate worker will pay £24 more for a few months. When the threshold rises in July, a Harrogate worker earning the median salary for the area will pay £108 less per year than they do now - £2,678.

This is compared to £2,179 across Yorkshire and The Humber as a whole, where the median salary for full-time employees is £29,022.

Mr Sunak said it was “a £6billion cut in personal tax for 30 million people across the UK, a tax cut for employees worth over £330 a year”.

Further measures unveiled include a 5p cut in fuel duty and a pledge to cut the basic rate of income tax from 20p in the pound to 19p in 2024. That’s in addition to a previously announced £150 council tax rebate for homes in council tax bands A to D, and a one-off repayable £200 discount off energy bills.

Despite this, a lot of people are finding that wages and benefit payment increases aren’t keeping track with these price rises.

Dawn Cussons, from Harrogate District Food Bank, said: “We have helped about 800 people so far this year. We were quiet last week but I expect when the energy cap is lifted that we will be inundated. We’ve had lots of people popping in that we haven’t seen before.

“Everything is going up. We’ve heard families talking about giving their car up, not just because they can’t afford to put petrol in, but because of the higher tax and insurance involved. For some this means their children moving schools. Food is going up, other bills, not just energy.

“We are very blessed here in Harrogate, it’s an affluent area, so we don’t struggle with donations. We get help from schools and churches, and it means we’ve been able to put some fresh food in the packages too, and we don’t turn anyone away.

“It’s supposed to be on a referral basis, with three packages in six months, but we’ve been helping people more often. If they are in need, we will give. People feel embarrassed and ashamed at having to come to a food bank and we try to put them at ease. Anyone can find themselves in need - even people who were previously in well-paid jobs.

“I spoke to one lady recently who has two children and she works. But after paying the bills, she just doesn’t have enough money left for food. We’re hearing more and more similar stories.”

Yorkshire charity StepChange has recommended ways of reducing the impact of the crisis on your finances. This includes putting together a budget and understanding what bills are the most important, trying to increase the amount of money you’ve got coming in, and looking at ways of reducing your spending.

StepChange recently teamed up with Asda to offer a series of five free financial talks for North Yorkshire residents as part of Debt Awareness Week 2022.

Each of the talks cover an important money related topic with different expert speakers providing insight. All five talks are available to watch now on Asda’s YouTube channel at: https://www.youtube.com/c/Asda/featured.

n See Page 8 for details of some of the organisations that can help if you’re struggling to make ends meet.