The cost-of-living crisis in the UK will affect all of us in 2022. With ever-changing facts and figures, it can be difficult to know exactly how your household will be affected.
We want to make it clear to understand, so we’ve compiled key information about what will be affected by the cost-of-living crisis in the UK. We’ve also suggested how equity release might help, if you feel you need further financial support in the coming months.
This year, the energy price cap was increased by 54% for 22 million Britons.
That means that the average household using a medium amount of gas and electricity could see a rise of around £693 a year. This cap is expected to rise again in October, increasing to £2,600, before a possible drop next spring.
However, prices are not expected to drop to pre-2022 levels for quite some time. In fact, the CEO of Centrica PLC, the company that owns British Gas, predicted in January that “high gas prices will be here for the next 18 months to 2 years.” 
Most of us will be aware of rising fuel prices, which have been affected by both the war in Ukraine and by increased global demand post-lockdown.
Although the government made a 5p cut on fuel duty in an attempt to curb rising costs, experts have warned that prices could rise further if supply issues continue.
Rail fares also increased in March this year, by an average of 3.8%. Thankfully this figure has been capped by the government and remains below the retail price inflation. 
Alongside fuel and energy prices, other daily costs have risen, and the effect of this inflation influences many aspects of daily life.
Inflation has hit a 40-year high of 9% this year, affecting household costs such as food, clothing, and furniture, amongst others. In contrast, the average pay rise this year was only 4.2%  , potentially causing problems for millions of workers.
In April, VAT rates increased to pre-pandemic levels, rising from 12.5% to 20%. This is likely to push up the prices at pubs, cafes, bars, and restaurants in coming months, as businesses struggle to cover the extra cost and recover finances after the pandemic.
Pensions have been big news in 2022, with the government announcing a one-year break in the triple-lock, the policy that is usually used to calculate state pension increases. That means that state pension this year was increased by just 3.1%, rather than the 8% increase that the triple-lock would have guaranteed.
Inflation is the main cause of concern for private pension holders, with a rise of 9% on average this year. However, many private pension companies will only raise payments by 5%. The head of research policy at AJ Bell stated, “If inflation averages at seven per cent, someone with a pension income of £10,000 and capped at five per cent would have the purchasing power of just £9,100 after five years.” With inflation now approaching 10%, retirees will miss out on £7,000 over their lifetimes. 
If you feel that you are struggling to retain the quality of life you would like in retirement, you might consider borrowing against the value of your property, to top-up your pension or even afford some luxuries.
The UK’s most popular equity release product is a Lifetime Mortgage. With a Lifetime Mortgage, you will remain the owner of your property for life. You will also benefit from a no-negative-equity guarantee, which means you will never owe more than the value of your property.
Bear in mind that accessing your property wealth now will reduce the value of your estate and could affect your entitlement to means-tested benefits. If you choose to move forward with Responsible Equity Release, you will be partnered with a local adviser, who will assess your personal situation and advise you on your best available options.
Financial expert Martin Lewis has spoken out about equity release and has offered some of his own advice about this flexible financial solution.
Martin Lewis suggests investigating a product called a Drawdown Lifetime Mortgage, which could help you to “only take what you need now and wait to take more until needed”.  Lewis advises that, "The sooner you borrow, the more expensive it is, as the interest has longer to compound. So borrow as little as you need now, and wait as long as you can to do it again."
Just bear in mind that your interest rate will be calculated and charged at the prevailing rate each time you choose to release from your reserve. That means that the rate assigned to any future release could be higher or lower than the rate you originally receive.
If you’re considering equity release and you need some support, we’re here to help. Call our friendly Devon-based Information Team to find out how a Lifetime Mortgage might help you through the cost-of-living crisis. The team will answer your questions and will be able to arrange a no-obligation meeting with an Equity Release Specialist, who will always tell you if a Lifetime Mortgage isn’t right for you.
To find out more about Lifetime Mortgages, and the various features available, why not book a no-obligation appointment with one of our fully qualified advisers? The Information Team can help with this on 0800 048 5384.
“Richard Johnson was my Equity Release advisor, who I can genuinely say, did a thoroughly professional job in keeping me informed, raising the pitfalls, as well as the advantages of the various options, and monitoring the paperwork throughout this process. I do not normally write reviews, unless I feel the service was exceptional.”
“I contacted Mr Kevin Williams to help guide us through the ER process, Kevin was extremely helpful, polite and kept us informed at all times. He was very efficient and keen to answer our questions, how nice to deal with somebody that is not ‘pushy’ or ‘aggressive’, I have the greatest respect for Kevin and should anybody read this review then fear not you will be in safe hands.”