“I think we got used to it,” Jess Daly says with some resignation about the experience of juggling family finances in a cost-of-living crisis now in its third year.
The latest UK inflation data for February is due to be released on Wednesday, with analysts expecting the headline rate to fall to 3.5%. In January, the figure remained unchanged at 4%the rise in gas and electricity bills having been offset by the first fall in food prices in more than two years and by good winter deals.
After a difficult time, the Dalys, who first spoke to the Guardian about their soaring bills in 2021, can see some light at the end of what has been a very long tunnel. But their optimism has little to do with the recent budget or the government’s claims that it has taken “steps” to bring down inflation.
There is joy at the prospect of a second child – a sister for Robin due next month – as well as greater financial security for the couple who live in Norwich. Jess, a library administrator at the University of East Anglia, was made redundant last year but kept her job, while her husband, Jon, recently got a better job at a large financial services company.
At the supermarket, Jess notices a drop in prices. She recently paid “just” £1.60 for butter, with a reduction remarkable enough to catch her attention (official data shows the cost of a butter). 250g block peaked to £2.36 last year). “I’m much more aware of the cost of things,” she says.
But more than falling food prices or energy bills – in April Britain’s energy price cap will fall from £238 to £1,690 – has made the biggest difference to their finances is their daughter Robin’s third birthday, which they celebrated. with a picnic in a local park, with friends and family, on a beautiful spring day.
Although Robin’s grandparents pitched in, the cost of childcare was a “significant challenge” and played on the couple’s minds as they considered having another baby. But her milestone means the family are now entitled to 30 hours of free childcare a week, which will mean a saving of £250 on their £475 monthly bill.
“We’re looking forward to having some disposable income,” says Jess. “For us, Covid, the cost of living crisis and having a baby all collided and we adopted quite a different lifestyle,” she says. “We spend almost nothing on socializing.”
“We’re not going out,” confirms Jon.
“The last 12 months have definitely been difficult,” he adds. “But there was always a glimmer of hope when Robin was three that it would mean our childcare costs would go down. I just got this new job that also makes more money.
Financial hacks that offered consumers simple ways to save money at the start of the cost of living crisis – such as switching supermarkets or buying their own brand rather than big brands – are now entrenched habits. At this stage of the crisis the couple, who don’t eat meat and shuttle between Asda and Morrisons, have done everything they can to reduce the cost of weekly shopping.
“We made lifestyle changes and stuck with them,” says Jon.
The family manages their budget carefully and keeps a spreadsheet of their expenses so they can track their household finances through 2018.
This time last year, the energy bill for their three-bed terrace house was just over £200 a month, but they report it is now £115. This is a big improvement, but it does not return to pre-crisis levels. In 2019 their direct debit was just £45.
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Set by energy regulator Ofgem, the new price cap from April represents a 12.3% reduction from £1,928 in the current quarter. The return of gas and electricity packages leads the couple to think again about the advantages and disadvantages of a “solution”.
Looking back on their spending, Jess says the most notable increases were on utilities, food and gas. “The council tax is pretty bad,” she says. “This has gone from £137 a month in 2018 to £178 for this year. Sure, almost everything else has gone up: streaming services, insurance, breakdown cover, the TV license and vet bills (for their cat, Polly), but not by such shocking amounts.
In its post-Budget analysis, the Institute for Fiscal Studies (IFS) warned that despite the Chancellor’s tax cuts, which included a 2p reduction in National Insurance contributions, households would be worse off during the elections, expected this year, than at the beginning of the year. this parliament in 2019.
Fortunately, the Dalys managed to secure a new five-year mortgage deal before the market crash set in during Liz Truss’ brief tenure as Prime Minister. “We managed to get by with an increase in our mortgage payments of just £50 a month… so that was a big relief,” says Jess.
However, she is concerned about the trade-off between taxes and spending on public services. “We are living in a time in our lives where we will depend more than ever on public services like health and education,” she says. “In Norwich we almost lost our walk-in health centre. It is still open, as we fought to keep it open, but at reduced hours. »
Now in the final weeks of her pregnancy, she hopes that when her baby is ready to go to daycare in 2025, he will have access to 30 hours of free childcare a week promised to working parents of all children over nine months.
“I’m really hopeful about the government’s new childcare policies because with this second baby it will make a big difference,” says Jess. “I’d like to think we spent the most money we’ll ever spend on child care.”