Money-saving expert Martin Lewis cautioned the UK could be gripped by civil unrest amidst spiralling costs.
The money-saving guru confessed to being ‘scared for people’ as inflation soared, and energy prices continued to accelerate. With lower to middle-income earners having ‘nothing left to cut back on’ Mr Lewis asserts ‘civil unrest isn’t far away’.
Rising inflation has seen the price of food and energy spiral to levels that have left people unable to pay their bills. In total, the lowest income earners are £1,300 worse off in their finances. Whilst, the threat of further unrest in Ukraine could exacerbate the damage further.
On average, energy costs have increased £700 per household. On April 1st, the aptly named ‘awful April’ energy bill rose 54% while petrol soared 39%, costing £23 more per tank.
Add to this food prices increase on average by 5.4% and the National Insurance contributions rise by 1.5%. This change will cost someone earning £30,000 more than £250 each year. The hike in national insurance won’t come into play until July. Whilst the increase is said to fund the NHS, it has faced serious backlash given the harsh economic climate.
The one positive to come from National Insurance changes, however, is that the threshold will increase to £12,570, partly negating the 1.5% hike in payments. Though in such times, this will hardly be enough.
52% of the British population are stressed about finances in 2022
It’s not surprising that over half of the British population have admitted to feeling stressed about their financial situation according to new research by Schroders. The worst-hit however, are the lowest income earners.
Many in Britain can no longer afford to put the heating on, cook warm meals or have hot water. For many families, they will need to make hard decisions. Mothers are said to be forgoing meals to allow their children to eat. Whilst others will need to decide between putting on the heating and having another meal.
Lewis warned that if people cannot keep their families warm and fed, ‘civil unrest is not far off.’ He argues that Rishi Sunak should subsidize at least 50% of energy price increases this April. He further reiterated the threat declaring, ‘When breadwinners cannot provide, anger brews and civil unrest brews.”
With many having to find creative ways to survive given the untenable cost of living increases, Mr. Lewis started a new feature on his podcast called ‘Heart the Human.’ The feature helps advise those feeling the brunt of the crisis most acutely. One example of a suggestion was to use hot water bottles in sleeping bags instead of using excessively expensive central heating. Mr. Lewis said he felt ‘slightly sick’ that the crisis had become so acute that he had to start the feature.
With presumption mounting, Prime Minister Boris Johnson this week claimed the government will support families ‘in any way that we can.’ A £22 bn is set to be deployed to support households through these ‘unquestionably tough times.’ However, he also warned he has limited power given his budget to affect global energy prices.
Author Bio: Daniel Tannenbaum
Daniel is a London-based financial consultant who has worked in fintech for over 10 years.