How to Finance Households in London

According to the Institute for Fiscal Studies, Londoners can expect a financial squeeze in the coming months. A publication in mid -October estimates a 0.1% reduction in real disposable income in UK households and predicts a sharp rise in inflation in the last few months of the year. Rising costs for necessities such as automobile fuel, electricity, and natural gas led to a record high inflation rate of 4.2% this October. IFS points to Brexit, increased demand due to removed Coronavirus restrictions, and continued labor shortages as key factors driving the “perfect storm” of price increases.

Wages and Cost of Living

Despite this, many Londoners will still have a lot of money to spend. Independent groups calculate a metric known as Real Living Wage in an attempt to reflect the economic realities of living in both London and the UK in general. Separately calculated wages in London come out at £ 11.05 per hour. At 48 hours per week and 52 weeks a year, it reaches £ 27,500 per year, which is less than the London average salary of £ 39,716. Although the city’s poorest were less affected by the pandemic, IFS director Paul Johnson noted that Universal Credit expansions and tax changes could actually narrow household income inequality.

Loans and Loans

The days of government -backed COVID emergency loans are long gone. But, there’s good news: whether you get good or bad credit, My Quick Loan can be a short -term, but smart solution for many UK households who could use a little help in the current financial climate. And there’s even better news: Bank of England consumer credit data for September suggests that finances are recovering and credit remains available. Interest rates on personal loans are rising, but they are still lower than they were before COVID in January 2020 despite current inflation rates.

Economic Scarring and Room For Hope

Today’s economic climate is complex, but there is room for hope. The IFS noted that the pace of economic recovery will have a major impact on long -term damage. Government actions, including emergency loans, debt forgiveness, tax changes, and public projects can have a huge impact. According to IFS, the economy is currently configuring. With proper support, they suggest that the long -term economic damage of the Coronavirus could be limited to half the 3% figure predicted by the Office for Budget Responsibility this March.

Changes Due to Lockdown

In terms of individual finances, things are more vague. COVID has brought major lifestyle changes to many households, forcing changes and improvements in logistics, shipping, and long -distance employment in many industries. The ability to work from home in multiple jobs allows households to save on transportation and potentially child care or rent. It’s easier than ever to send goods (and groceries and food) cheaply to your doorstep. Wage growth may be limited in certain sectors, but workers in those fields will benefit from increased disposable income, giving them the financial freedom to support other sectors by increasing spending. . Inflation, Brexit, and the ongoing impact of the Coronavirus will continue to have negative effects on Londoner’s finances, but it’s not clear how big those effects will be.

The Road to Recovery

Prices are likely to rise this holiday season, but most Londoners have the tools they need to stay on their toes. Universal Credit expansions and wage increases will help some, while others will take advantage of relatively low interest rates to use loans to get through any difficult patches. Smart solutions during lockdown such as video conferencing and having items shipped will help offset the rising cost of vehicle fuel for some. Many households will feel the squeeze, but the economy is definitely starting to recover.