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What causes higher living costs?

How to cope with higher living costs

Get help with the cost of living

How is the government helping with the cost of living?

Higher prices for essentials like energy, food and fuel can put real pressure on your budget. This guide explains why living costs can rise and shares practical ways to cut costs and manage bills.

We also look at possible support, including benefits, help from your providers, and free UK organisations if you’re struggling.

Living costs remain high due to high inflation. This led to the average price of goods and services increasing faster than people’s wages and income. 

Inflation can be driven by a mix of factors, such as changes in global energy prices, disruption to supply chains, and labour shortages. When companies face higher operating costs, they often put up their prices, creating a knock-on effect.

Inflation can also move up and down over time. Even when it starts to fall, prices don’t usually go back to previous levels. Instead, they tend to rise more slowly. Visit the for more information on inflation, including the current rate.

Whatever your situation, creating a budget can make it easier to manage your money. It’ll help you see what money you have regularly coming in and going out and possibly find areas to reduce your spending. 

If you need support reviewing your finances, or you’re finding that rising costs are simply making things unaffordable – we’re here to help. 

Go through your bank statements and look at your standing orders and Direct Debits to see what you’re paying for. You may be able to cancel and save on subscription services you no longer use.

Now is also a good time to review existing policies, such as home insurance, utility bills, broadband or phone contracts – to make sure you’re getting the best value for your money. It’s also worth noting down when policies are coming to an end. You can often negotiate better prices before they auto-renew. 

If you’ve gone beyond the minimum term of your broadband contract, you can switch to another provider without paying a penalty. Always check how much notice you need to give with your current provider. The regulator Ofcom says customers can also leave mid-contract without being charged a penalty. This is only if a provider raises prices by more than the Retail Price Index rate of inflation. 

It is worth thinking about how you pay your bills. You could save money, or give yourself more control over when you pay, depending on which method you choose.

Whichever way you choose to pay your bills you should always pay them off on time. This will ensure you avoid late payment charges. Try choosing one day a month and setting a reminder to check all your bills on that day. 

If you have the 51³Ô¹ÏÍø Mobile Banking app, you can use our balance forecast feature. This estimates what you will owe for the month ahead, based on your regular bills. It then shows you how much you have left once those standing orders, Direct Debits and subscriptions are paid. This can help make it easier to budget successfully from one payday to the next.

Some bills can be paid either once a year, or in monthly instalments. This usually applies to things like car or home insurance. Paying your annual premium in one go can be the cheapest way to do it. However, it can be difficult to afford lump sum payments. Always check with your provider as not all polices charge interest on monthly payments.

Paying off debt in a smart way can reduce the amount of interest you pay. For example, if you’re being charged interest on your credit card, a 0% balance transfer credit card could save you money. 

If you have multiple debts, a cost-effective option may be to repay the debt with the highest interest rate first, as it’s charging you the most to borrow the money. Keep in mind – you’ll still need to meet at least the minimum repayments on all debts to avoid charges. 

If juggling multiple debts is too stressful, a debt consolidation loan can be a way to simplify your repayments and help you get back on track. However, it’s important to consider whether you’ll repay more on a monthly basis and over the course of the loan.

Explore: Tips for paying off your credit card

Benefits and other government support can help if you’re out of work or on a low income, but you may be eligible for other types of support too. For example:

Explore: Check if you’re missing out on unclaimed benefits

From washing your clothes at a lower temperature to switching energy suppliers – there are ways you can save money on energy. You can also reduce your energy bill by making your home more energy efficient. For example, by draft-proofing unwanted gaps and insulating pipes, you can reduce heat loss and save money.

The energy regulator sets a price cap to limit gas and electricity bills for a typical household if they pay by direct debit. 

Food shopping is one of the biggest weekly household expenses. From setting a budget, to planning your meals and storing your food, there's a range of things you can do to save money at the supermarket.

You can check local fuel station prices online before filling up or take advantage of loyalty schemes. There are also ways you can make your car more fuel-efficient, so the fuel you do buy, lasts longer. For example: 

You may have tried everything and cut back on non-essential spending. But what if it’s not enough? 

If you’re unable to afford the cost of living, here are some ways you can get help:

When debt becomes overwhelming, it can be hard to know where to start. But remember – you can get support. Make a clear list of all your debts and the amount owed on each. The aim is to pay the priority debts first. These are the ones with the biggest consequences if you don’t pay, such as your mortgage or a court-ordered payment. 

Speak to the companies you owe. They can help you create a repayment plan that’s manageable and will prevent you from missing any future payments.

If you’re an HSBC customer and you’ve missed – or are worried about missing – a loan or credit card payment, or you're concerned about your overdraft, we’re here to help.

If you’re struggling to pay your bills, or are worried about future payments, it’s best to get help straight away. Don’t ignore them. Speak to the companies you owe to let them know. They may be able to offer other options for how or when you pay.

If you’re worried you won't be able to make future mortgage payments, or are already in arrears, your mortgage lender should be able to help. 

If you’re an HSBC customer, we’re here to provide mortgage payment support. Whatever your situation, we can help you put a plan in place. 

If you’re struggling to pay your rent, it’s important to let your landlord or letting agency know as soon as possible. If your rent isn’t paid, the money owed is called 'rent arrears'. These are priority debts, which mean you should sort them out first, before tackling other debts – to avoid the risk of eviction.

Create a budget and work out how much you can afford to pay. Contact your landlord or letting agency – let them know you’re taking steps to deal with the situation and offer to pay what you can at this stage. to help you do this. It’s important you stick with the new payment plan if agreed. If they refuse your offer, or don’t reply – it’s important you make the payments anyway. 

Other support you may be entitled to can include:

If you’re worried about rent arrears or eviction, , or (if you live in Northern Ireland) can help you understand your rights and what to do next.  

If you’re struggling to pay for food, can help, as well as provide other household items like toiletries or cleaning products.

To be eligible, you’ll need a referral first, which you can get through the food bank directly or one of the following: 

Government support can change over time and may include payments, discounts, or other schemes to help with household costs. Eligibility and what’s available will depend on your circumstances and what support is currently in place.

For the latest information on government support, visit .

Managing higher living costs can feel overwhelming. Taking control of your finances is a positive first step. By reviewing your budget, exploring smarter ways to pay your bills, and checking your eligibility for benefits or housing support, you can find valuable ways to ease the pressure.

Remember, if you are struggling with debts, rent, or bills, reach out for help immediately. There is always support available to help you get back on track.

This article was last updated: 15/06/2026, 08:40