When Rishi Sunak released his spring statement it didn’t look good for the majority of Brits.
An analysis by the Institute for Fiscal Studies (IFS) found a median earner on around £27,500 a year will be about £360 worse off in the next financial year, while someone earning around £40,000 will be around £800 worse off.
Paul Johnson, the director of the IFS, accused Sunak of being a “fiscal illusionist” by claiming to be lowering taxes while actually allowing them to rise.
Meanwhile, April 1 sees the energy price cap increase, meaning a typical household can expect their bills to go up by almost £700 per year, the highest hike in decades. The cost of food is also rising, as is the cost of petrol.
It’s fair to say this news is bleak for everyone. This isn’t just going to affect people who are already on the poverty line (although they may feel the impacts most acutely). All of our lives will change from this month.
The British Association for Counselling and Psychotherapy (BACP) found that 40% of the public feel anxious or nervous about affording to pay for bills due to the rise in the cost of living and inflation.
Additionally, 16% of the public are losing sleep over rising cost of living concerns. And nearly one fifth (19%) have been consequently cutting back on activities that support their mental health, such as their gym membership or art classes.
On social media, many have said they’re “angry” about the cost of living crisis, while others have used the word “afraid”.
Paul,* a 26-year-old product manager from London, is worried that the increase of the cost of living, tax and student loads repayments will mean he has less money to live, save and look after his family.
“I financially support other family members since I have had the most social mobility in our family, which means I cover myself and other people’s expenses,” he says. “I think I now have to choose between having some enjoyment in life and saving for the uncertain future.”
Paul gives half of his salary to his parents who are disabled and can’t work, so he’s concerned about how he’ll continue providing for them.
“The council tax and energy increases are about £300-400 extra a month not including rising food costs. It’s not sustainable,” he says. “I don’t know how my family would survive if they didn’t have support because the benefits they receive are not enough.”
Ahead of April, he started reviewing his finances and cut down where possible. “Mainly on groceries and spending money going out, otherwise I will have no money left at the end of the month,” he says.
Charlene* is equally nervous. She says she’s not always had the best relationship with money, but now budgets every month. “Saving is something I really want to do, but it’s hard. especially now,” she says. “I live on my own after my ex moved out and have had to cover more bills since she left.”
It’s because of this that she worries about life from April onwards.
“I’m worried about being able to save for a rainy day, which is virtually impossible for me,” she says.
“I’ll have to be even stricter with my budget and really pick and choose where I go and what I do with friends, I spend a lot of weekends at home sometimes. Also there’s FOMO of being able to travel, I can’t do that right now.
“The cost of food is really concerning to me too because the food isn’t fresh, it doesn’t last, but it costs more. Your money just doesn’t go far enough.”
Nabilla Doma, who is a 26-year-old influencer marketer, says her relationship with her own personal finances is pretty balanced, but that she is also feeling very money-conscious right now.
“I’m worried about the general cost of living. We all have a general standard of life that we like and I’m concerned that I’lll see a massive shift of quality of life in myself and those around me, particularly those who earn substantially less me who have families,” Doma says.
“I’m also worried about the cost of travel and the cost of food, massively, I’m someone who tries to cook and eat at home for the majority of the week and eat take out on the weekend and I think the cost of food will have a big effect on the everyday person.”
If concerns about money are impacting your mental health, seek support and advice. The charity Mind has a section on its website called money and mental health, which may help. Other useful organisations include:
Money Helper
National Debtline (0808 808 4000)
StepChange Debt Charity (0800 138 1111)
*Some surnames have been omitted to provide anonymity.