FAMILIES are set to be £1,700 a year worse off as the cost of living crunch sends prices of gas, fuel and food soaring.
Rising costs will mean the typical family will be hundreds of pounds worse off next year, and many households are already feeling the pinch.
The costs of essentials are soaring with households set to be out of pocket this Christmas
Number-crunching by BBC Panorama found that Christmas will cost an extra £109 this year too.
Families are having to shell out hundreds of pounds more on the same basket of goods as they did a year ago.
Analysis by the Centre for Economic and Business Research (CEBR) said a family of two adults and two children will spend an extra £33.60 a week on essentials in December.
And there are warnings that there may be worse to come as not all price rises have yet been passed on to consumers.
Tonight’s BBC Panorama will look at whether the supply chain crisis could lead to further increases.
It will feature Bidfood, one of the biggest food distributors in the UK, which brings in products from more than 1,000 suppliers but is struggling to find enough HGV drivers.
Andrew Selley, chief executive of Bidfood, said: “I’ve worked in this business for over 20 years and I’ve never known things to be as challenging as they are currently.
“Whether your looking at people resources, product availability, everything seems to be coming together at the moment and it presents us with a very challenging set of circumstances.”
What is causing price rises?
It’s the highest inflation has been in a decade.
Inflation is important because it’s an indicator of the cost of living.
If it’s 4.2% it means a basket of goods that costs £100 now will cost £104.20 in a year.
The latest figures show inflation surged to nearly its highest since December 2011, pushed up by rising energy and fuel costs.
But the CEBR’s research found that some household staples had risen in price by as much as 15%.
Margarine is 15.6% more expensive this Christmas, yoghurt is up by 9.7%, and lamb 8.5%.
Consumers are also seeing price increases on crisps, fruit, turkey and pork.
There are hopes that some price rises could have peaked, however.
The AA reports that petrol prices have eased off for the first time since November 2020.
Prices at the pumps hit a record 147.72p a litre last month, but have now fallen slightly to 147.28p.
It comes as the wholesale price of oil dropped $10 a barrel at the end of the last week, reducing costs for petrol retailers.
How to cut costs
Any families concerned about rising costs can take steps to reduce their outgoings.
For everything from car insurance to home insurance and broadband, you can often bring the cost down by shopping around.
Make a note in the diary to start shopping around for a new deal a month before – this is typically when you can get the best prices.
Reduce your grocery bill by shopping for own brand products and avoid being enticed by offers for things you don’t really need.
Supermarket loyalty schemes such as Tesco Clubcard can help you make some savings.
When it comes to Christmas, buy in advance to spread the cost like this savvy mum.
Set a spending limit with friends and family so you don’t go overboard, or suggest a Secret Santa so you only buy one gift.
You should also check to see if you can get any help as millions of people are missing out on benefits they could be claiming.
For some extra cash, take advantage of offers from banks, which are currently paying out cash to entice new customers.
Santander currently pays £140 if you switch to its current account as well a £20 Amazon voucher, and Nationwide pays up to £125.
Struggling families can apply for cash and grants for furniture, bills and food up to £1,000 under the welfare assistance scheme.
If you claim Universal Credit, you can apply for a Christmas emergency loan worth £1,000.
You could be eligible for the winter fuel discount or cold weather payments, which help cover the cost of heating homes when the temperature drops.
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