"I worry about running out of savings"

The impact of offering Stream

Our cost-of-living case studies look at the real-world impact on people. They’re designed to highlight the decisions that rising prices are forcing people to make. Everyone’s situation is unique and everyone is affected by financial shocks in different ways. We’re trying to bring those ways to life.

Joe, 28, works as a barista in a central London bar/cafe, and lives in a rented one-bedroom flat in North London with his partner.

Joe works 40-hour weeks with frequent overtime. He is employed at his bar/cafe through an outsourced company, and earns below the London Living Wage. His partner also works in the hospitality sector.

The couple’s energy provider went bust a few months ago, and they were automatically shifted over to a new provider. Even after doing extensive meter tests, negotiating a payment plan, and reducing energy consumption as much as possible, Joe’s gas and electric bill has soared to over £150 per month.

Before energy bills, transport fares and food prices rose significantly, Joe “never had a lot of spare cash”, but could just about cover his costs each month. Today, however, the cafe worker finds “it’s getting harder to make ends meet”.

He says: “I know I am personally spending more than I’m earning, and dipping into savings, and that’s not sustainable because they [savings] will run out eventually.

“It’s just that everything costs more money.”

“You notice certain grocery and other daily costs going up. The biggest thing for me was our energy bill, it’s ludicrously high… The only tariff we are able to sign up to is crazily expensive, and there is not really a chance to get anything cheaper. We’re paying the amount we should be paying for a whole house. Even what they’ve reduced it to, it’s [the energy bill is] two times what it should be.

“With rent and bills and basic costs, that basically eats up all the money we have earned in a month at this point. Not much is left for saving or enjoyment.

“How are my wages going to cover more increases?”

The situation has had an impact on Joe’s mental wellbeing.

“I just worry that I’m going to run out of savings and have to make lifestyle changes I don’t want to have to make,” he says. “Like working a lot more, moving further out of London, having to cut back on any nice things. It’s not like we live a crazy life anyway. You just worry that there are going to be hard times.”

He explains: “I don’t want to have to work 50 or 60 hour weeks, as I know that my life and my mental and physical health would deteriorate a lot – and I don’t want to have to move to Zone 6 just so we can afford to rent.

“There are worries about how much longer, how much further can this go before we have to start sacrificing the things that we have expected from life – like a holiday here and there, living in a nice-ish area, going out for a meal and a drink once in a while. We’re feeling more and more like it’s a struggle.”

Joe has already taken action to reduce his spending and is speaking to management at work about a potential pay increase.

“I’m trying to budget the best I can, being careful, trying not to spend too much,” he says. “You do feel quite powerless… It is the kind of thing where you just feel ‘ooph, okay, just hold on and see what happens and where we end up’.”

The cafe worker said the ideal help he needs at this point is a pay rise. He also believes ministers should make a similar move to that made by the French government earlier this year, and force energy giants to take some of the financial hit of rocketing energy costs by limiting bill hikes to a set percentage.

“Support is needed to increase people’s wages following the increases in how much life costs for everyone,” he says. “We have a really, really low wage economy, so everyone should be paid more. And these energy companies are having their biggest profits right now… Ordinary people are having to carry the weight, which is how it’s been going with so many crises since 2008.”

Joe concludes that the current cost-of-living increases have seen “a deepening of general problems that lots of people were facing”. He says: “I’ve always worked fairly low wage jobs, so you’re never paid a lot more than your outgoings, but it’s a lot more stark now. I’m earning less than I need to spend because of my outgoings, so the general anxiety becomes a lot more acute.”

How can you help employees that are struggling with prices going up rapidly? Check out out post on four ways to support your staff through the cost-of-living crisis.