One of the good things to come out of the Autumn Budget is the increase in the National Living Wage from £8.91 to £9.50 an hour. But is it sufficient amid rising inflation? What can you do to ensure you remain financially resilient?
How much will National Living Wage rates rise?
Starting in April 2022, the National Living Wage rates will rise for all age groups:
- 23 and over: £9.50
- 21 to 22: £9.18
- 18 to 20: £6.83
- 16 to 17: £4.81
- Apprentice rate (for apprentices under the age of 19 in the first year of apprenticeship): £4.81
What does the National Living Wage increase mean for your finances?
The increase will add an extra £1,000+ per year to the pockets of Brits on the National Living Wage. This amount can be used to ease the cost of living pressures and make rent more affordable.
However, there’s a worry that this extra £1,000+ per year might not be sufficient. Inflation is on the rise, and it appears it’s not going down any time soon. In fact, when announcing the Autumn Budget, Chancellor Rishi Sunak commented, “Inflation in September was 3.1% and is likely to rise further, with the OBR expecting CPI to average 4% over next year.”
This might push the cost of living through the roof, meaning the increase in the National Living Wage may only ease some of the pressure without making any significant positive impact.
And let’s not forget the recent benefit cuts and soaring energy bills that haven’t made it any easier for vulnerable households.
What can you do to stay financially resilient?
Despite the chancellor’s warning of a rising cost of living, he offered hope by explaining how the government would act.
He said, “I have written to the Governor of the Bank of England today to reaffirm their remit to achieve low and stable inflation. And people should be reassured: they have a strong track record in doing so. I understand people are concerned about global inflation – but they have a government here at home ready and willing to act.”
Regardless, here are three ways you can remain financially resilient amid the current level of uncertainty and soaring living costs.
1. Assess your incomings and outgoings
Understanding your incomings and outgoings is important, and it’s an ideal starting point. It helps you identify where you can cut back on spending to save or invest. You could also seek help from a financial adviser to find out how you can quickly but comfortably pay off any existing debts.
2. Check whether you’re eligible for government benefits
The government recently announced two support funds to help support vulnerable households, including those in rent arrears: the new £500 million Household Support Fund and a £65 million support package.
It’s a good idea to find out whether you’re eligible. This could help clear rent arrears and cover living costs, allowing you to save or invest – two key elements in building a financial safety net.
These are not the only government benefits available. You can find the complete list of government benefits on the gov.uk website.
3. Start a side hustle to supplement your income
If you’re struggling to make ends meet, it’s could be a good idea to start a side hustle. You could put your skills and creativity to good use to bring in some extra money. Getting started is typically inexpensive and you should be able to do get everything sorted your spare time.