Whether we like it or not, our finances are one of the most important things in our day-to-day lives. Sometimes things might be going well, and you feel like you’ve got a good handle on everything. But then suddenly, you’re hit with an unexpected bill that you have no way of paying. You might turn to an online payday loan to help you out of the sticky situation. But other times, there are ways your finances can be impacted by things beyond your control. Let’s take a deeper look at the financial news as we head into Summer 2022…
Energy Bills
Everyone in the UK has been affected by the energy crisis. Whether your long time supplier has gone into administration, or your bills have more than doubled, the energy industry is deeply affecting people’s finances. The price cap has increased, leaving people paying around £1,800 a year on average, and with things not looking great and being in the middle of an energy crisis, it’s unclear whether or not prices could increase further.
Summer may provide people with some relief as they use less central heating thanks to the warmer weather, but the Winter may be another story. Some people are going to use the Summer as a way to build up some credit on their energy account to hopefully soften the blow of their Winter bills, but this might not be achievable for everyone. Depending on how the energy crisis plays out over 2022, energy bills may continue to rise or stay the same.
Insurance
Although things aren’t looking that great in the UK economy right now, there is some good news for insurance customers. The Financial Conduct Authority is preventing insurance companies from charging low prices to attract customers, and then hiking them up when it comes to renewing their contracts.
This could mean that people will see a decrease in costs when renewing their insurance as companies aren’t allowed to charge more to make up for the loss they made when promising low prices at the start. This will be welcome news for insurance customers and will hopefully allow them to save a little bit of money over the year.
Interest Rates And Inflation
Recently, the Bank of England raised the base rate for interest to 1%, the highest it’s been in over 10 years. This is also the fourth time the interest rates have been raised and many are predicting it could still be on the rise for a while to come. It’s also been suggested that inflation may increase to as much as 10% if things carry on as they are at the moment, and reports show that 83% of UK adults have seen a significant increase in their cost of living.
With interest rates and inflation on the rise, money is rapidly losing value. But the Bank of England does want to bring inflation back down to try and ease the cost of living and make the UK financially stable once again.
Mortgages
The UK property market is currently growing exponentially, and house prices are increasing rapidly. However, the typical divide between the north and south housing prices is predicted to shrink, making homes cost a similar amount no matter where you live. On average, house prices have grown between 7% and 10%. In the UK, over 1 million fixed-rate mortgages are ending in 2022, so a lot of people are going to find that their payments increase when they renew because of the increase in interest.
But people that chose a short term fixed-rate mortgage may suffer the most, as their payments could increase by over £100. They originally may have chosen the short term mortgage for its cheaper payments, so they may find themselves in a tricky situation. They can no longer afford their mortgage payments, but the increase in housing prices means they can’t afford to move either. Over the Summer, more increases are expected, so the future of the housing market is uncertain.
It does seem like everything is on the incline in the UK, and while this may be true, there are procedures being put in place to help. There may be tough times ahead, but then again, things could improve, only time will tell. There are however some positive notes, such as heading into a post-pandemic world.
After such a long period of time in national lockdowns, people can finally meet up with friends and loved ones in the sun. Summer 2022 can still be a good one yet!
