The cost of living has always been a cause for concern amongst the general public, but recent times have seen prices soar significantly. Our personal finance experts have looked into which areas are hit hardest and how things have changed in the last few years.
The cost of living refers to the price you have to pay to maintain a decent standard of living. While this is affected by how much you earn, other factors such as inflation, taxes and things such as the COVID-19 pandemic all affect the cost of living.
Although the cost of living crisis has undoubtedly got worse in the last year, some families have been struggling for much longer than that. But which parts of the country are worst affected? And how have things changed in the last five years? We have looked into a number of government sources and other resources to find out.
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Housing is one of the biggest costs that the public face, especially for those who are renting properties. Demand for housing remains high, especially in major urban city centres.
With that in mind, it’s perhaps not surprising that 19 out of the top 20 most expensive places to rent are found in London.
Kensington & Chelsea is the most expensive, with the average renter paying £2,971 per month in this affluent area of the capital.
|Local authority||Region||Average monthly rent||Five-year difference|
|Kensington and Chelsea||London||£2,971||10.80%|
|City of Westminster||London||£2,597||12.90%|
|Hammersmith and Fulham||London||£2,173||13.10%|
|City of London||London||£2,048||7.50%|
The area that has seen the biggest increase in rents is still among the most affordable. Blaenau Gwent, in south-east Wales, has seen rents go up by 45.3% in the last five years, although it still costs just £567 a month.
|Local authority||Region||Average monthly rent||Five-year difference|
If you'd like to read more on this topic, we've collated the latest UK cost of living statistics and trends, covering inflation rates, average UK living costs, income, house prices, and more.
Getting on the property ladder is harder than ever before and house prices have continued to increase, even in the face of the pandemic.
As with rents, demand is highest in London and the South, with Kensington & Chelsea once again being the most expensive place, at £1,513,711.
|Local authority||Region||Average house price 2022||Five-year difference|
|Kensington and Chelsea||London||£1,513,711||8.10%|
|City of Westminster||London||£977,554||-11.90%|
|City of London||London||£838,145||-7.50%|
|Richmond upon Thames||London||£792,538||19.40%|
|Hammersmith and Fulham||London||£721,185||-6.80%|
Prices have increased the most in the last five years in the Scottish council area of Na h-Eileanan Siar, better known as the Outer Hebrides.
Here, the average house price has increased by about three quarters, from £91,482 in 2017 to £159,288 in 2022.
|Local authority||Average house price 2017||Average house price 2022||Five-year difference|
|Na h-Eileanan Siar||£91,482||£159,288||74.10%|
|Rhondda Cynon Taf||£100,624||£149,724||48.80%|
Energy bills are one of the most contentious living costs that are on the rise currently, with demand for gas increasing, while supply is being limited.
Those on Merseyside and in North Wales pay the most for their electricity, with an average unit cost of 22.41p per kWh. In real terms, that equates to £807 a year.
Residents of Northern Ireland pay the least, with a unit cost of 19.43p per kWh and £699 per year.
|Region||Average unit cost (per kWh)||Average overall bill||Four-year difference|
|Merseyside & North Wales||£0.22||£807||28.60%|
However, Northern Ireland also has seen the greatest increase in prices, up by 34.3% between 2017 and 2021.
|Region||2017 Average overall bill||2021 Average overall bill||Four-year difference|
|Merseyside & North Wales||£627||£807||28.60%|
London pays the most when it comes to gas, at 4.27p per kWh, or £581 per year. That figure doesn’t vary too much around the country, with those in the North East paying £538 a year in comparison.
|Region||2021 Average unit cost (per kWh)||2021 Average overall bill||Three-year difference|
|Merseyside & North Wales||£0.04||£557||3.50%|
Those in South Wales have been hit the hardest when it comes to rising gas prices, which went up 5.6% between 2018 and 2021.
|Region||2018 Average overall bill||2021 Average overall bill||Three-year difference|
|Merseyside & North Wales||£593||£557||3.54%|
You may think that Council Tax is highest in areas with the highest property prices, although to some extent, the opposite is true.
The average Band D prices paid in high-value areas in London like Westminster and Wandsworth are actually the lowest, at £829 and £845 respectively.
On the other hand, the average Band D property in Nottingham pays the most, at £2,226 a year.
|Local authority||Region||Average Band D Council Tax 2021-22||Five-year difference|
|Newark & Sherwood||East Midlands||£2,171||22.20%|
|West Devon||South West||£2,167||24.80%|
The area where residents have seen the greatest council taxi hike is Pembrokeshire, where the average Band D tax has risen by 40.4% in five years.
|Local authority||Average Band D Council Tax 2016-2017||Average Band D Council Tax 2021-22||Five-year difference|
|Isle of Wight||£1,616||£2,072||28.22%|
While residents in Northern Ireland don’t pay Council Tax, they do pay domestic rates, consisting of a regional rate set by Stormont and a district rate set by local councils.
Taking into account how these rates would be applied to the average house price in each area, those in Ards & North Down pay the most on average.
With an average house price of £187,947, being charged a rate of 0.872%, locals here can expect to pay around £1,639.
|Local authority||2022 Average house price||2022 Rate||Five-year difference|
|Ards and North Down||£187,947||0.87%||55.00%|
|Lisburn and Castlereagh||£189,968||0.84%||49.10%|
|Fermanagh and Omagh||£153,267||0.99%||71.40%|
|Causeway Coast and Glens||£183,110||0.81%||47.20%|
|Newry Mourne and Down||£176,796||0.81%||39.20%|
|Antrim and Newtownabbey||£166,678||0.83%||35.90%|
|Derry City and Strabane||£145,741||0.87%||32.70%|
|Armagh City Banbridge and Craigavon||£146,577||0.82%||27.60%|
|Mid and East Antrim||£151,794||0.78%||19.60%|
|Local authority||2017 Average house price||2017 Rate||2017 Average rate amount|
|Fermanagh and Omagh||£116,456||0.76%||£881|
|Ards and North Down||£145,678||0.73%||£1,057|
|Lisburn and Castlereagh||£151,406||0.71%||£1,069|
|Causeway Coast and Glens||£130,676||0.77%||£1,012|
|Newry Mourne and Down||£130,400||0.79%||£1,026|
|Antrim and Newtownabbey||£133,213||0.76%||£1,017|
|Derry City and Strabane||£109,518||0.87%||£955|
|Armagh City Banbridge and Craigavon||£113,596||0.83%||£941|
|Mid and East Antrim||£120,442||0.83%||£996|
|Local authority||2022 Average house price||2022 Rate||2022 Average rate amount|
|Fermanagh and Omagh||£153,267||0.99%||£1,510|
|Ards and North Down||£187,947||0.87%||£1,639|
|Lisburn and Castlereagh||£189,968||0.84%||£1,594|
|Causeway Coast and Glens||£183,110||0.81%||£1,490|
|Newry Mourne and Down||£176,796||0.81%||£1,428|
|Antrim and Newtownabbey||£166,678||0.83%||£1,382|
|Derry City and Strabane||£145,741||0.87%||£1,268|
|Armagh City Banbridge and Craigavon||£146,577||0.82%||£1,201|
|Mid and East Antrim||£151,794||0.78%||£1,191|
|Local authority||Five-year difference|
|Fermanagh and Omagh||71.40%|
|Ards and North Down||55.00%|
|Lisburn and Castlereagh||49.10%|
|Causeway Coast and Glens||47.20%|
|Newry Mourne and Down||39.20%|
|Antrim and Newtownabbey||35.90%|
|Derry City and Strabane||32.70%|
|Armagh City Banbridge and Craigavon||27.60%|
|Mid and East Antrim||19.60%|
Another outgoing that has received a lot of media coverage is that of fuel, with some petrol stations charging as much as £2 a litre.
While the cost of fuel is fluctuating by the week, as of June 2022 it stands at £1.9272 per litre of unleaded, £1.8310 for premium unleaded and £1.9015 for diesel.
Those prices have all increased by more than double compared to the same month five years ago, as much as 61.8% for diesel.
|Fuel type||Five-year difference|
Looking at the cost of other everyday commodities and services such as groceries, these have increased by 11.5% in the last five years.
Spending has increased the most on restaurants and hotels (24.5%). However, spending in a couple of areas has decreased, including education, clothing & footwear and household goods & services.
|Rank||Commodity or service||2019-20||Five-year difference|
|1||Housing, fuel & power||£83.00||14.00%|
|3||Other expenditure items||£79.30||18.50%|
|4||Recreation & culture||£74.80||7.90%|
|5||Food & non-alcoholic drinks||£63.70||9.30%|
|6||Restaurants & hotels||£52.90||24.50%|
|7||Miscellaneous goods & services||£45.70||13.10%|
|8||Household goods & services||£36.50||-0.50%|
|9||Clothing & footwear||£23.40||-1.30%|
|10||Alcoholic drinks, tobacco & narcotics||£12.90||7.50%|
|Commodity or service||2014-15||2019-20||Five-year difference|
|Restaurants & hotels||£42.50||£52.90||24.50%|
|Other expenditure items||£66.90||£79.30||18.50%|
|Housing, fuel & power||£72.80||£83.00||14.00%|
|Miscellaneous goods & services||£40.40||£45.70||13.10%|
|Food & non-alcoholic drinks||£58.30||£63.70||9.30%|
|Recreation & culture||£69.30||£74.80||7.90%|
|Alcoholic drinks, tobacco & narcotics||£12.00||£12.90||7.50%|
|Household goods & services||£36.70||£36.50||-0.50%|
|Clothing & footwear||£23.70||£23.40||-1.30%|
While rising prices make it much harder to achieve a good standard of living, this is obviously offset by higher earnings.
However, earnings have largely failed to increase at the same rate as many of the costs above.
Unsurprisingly, the area with the highest property and rent prices is also the place with the highest earnings.
Kensington & Chelsea sees the average employee make £39,566, over twice as much as the lowest earning area, Melton, in the East Midlands.
|Local authority||Region||Average annual income 2021||Five-year difference|
|Kensington and Chelsea||London||£39,566||11.30%|
|St Albans||East of England||£37,788||12.90%|
|Hammersmith and Fulham||London||£37,003||6.70%|
|Richmond upon Thames||London||£36,372||-3.50%|
|Surrey Heath||South East||£36,134||15.00%|
In the last five years, earnings have increased the most in Na h-Eileanan Siar, the small group of Scottish islands better known as the Outer Hebrides, (40.8%). But in some areas, they’ve actually decreased (as much as -14.1% in Brentwood).
|Local authority||2016 Average annual income||2021 Average annual income||Five-year difference|
|Na h-Eileanan Siar||£19,324||£27,205||40.80%|
|Pembrokeshire / Sir Benfro||£18,587||£23,746||27.80%|
Those who are no longer working are amongst those affected the most by rising living costs, with saved pension pots not keeping up with inflation.
For a retired couple, the average pension income is highest in the South East, at £691.
|3||East of England||£621||9.90%|
|11||Yorkshire and the Humber||£540||11.10%|
The area where this has increased the most is Northern Ireland, going up by just under a quarter.
|Yorkshire and the Humber||£486||£540||11.10%|
|East of England||£565||£621||9.90%|
Taking into account the costs of the commodities and services above, and comparing them to average earnings, which region ends up with the most money left over?
Given that earnings are so much higher in London, it may be unsurprising that those in the capital have the highest estimated disposable income, at £329.20.
|Region||2020 Average weekly expenditure per person||2020 Average weekly earnings||2020 Estimated disposable income||Five-year increase|
|Yorkshire and The Humber||£233.70||£442.30||£208.60||8.40%|
While this amount has increased by around a quarter in Northern Ireland, in the South East, disposable income has only grown by 1.7%.
|Region||2015 Average weekly expenditure per person||2015 Average weekly earnings|
|Yorkshire and The Humber||£196.60||£389.10|
|Region||2020 Average weekly expenditure per person||2020 Average weekly earnings||2020 Estimated disposable income|
|Yorkshire and The Humber||£233.70||£442.30||£208.60|
|Yorkshire and The Humber||8.40%|
Dealing with debt can be disheartening and seem like an uphill struggle, but there are steps you can take to tackle it.
Some debts are more urgent than others, so by making a list of all the amounts you owe, you can make sure you're dealing with your secured loans (mortgages and rent) before your unsecured loans (credit cards and overdraft).
Although your creditors might feel like the last people you want to speak to whilst in debt, the Banking Code says that banks must be sympathetic towards people's missed payments, so get in touch with your lenders and explain your situation. They may be able to offer you a manageable repayment plan that enables you to pay back what you owe in smaller monthly payments.
Write out a budget that clearly shows you how much money you have coming in per month, what your bills are, and therefore how much extra spending money you can afford per month. This will not only help you figure out how much you can afford to spend on debt repayments, it can also highlight where you are over spending, and where to make cut-backs.
It's easy for debt to spiral out of control and become problematic, especially during the current cost of living crisis, but there is help out there. The government are providing help for households, so visit Help for households to find out what support you may be eligible for.
Ever wondered how inflation and the rising cost of living are affecting your household costs? You can use the Government's inflation calculator below to see how increases in the cost of living have affected you in the past year, and work out your personal inflation rate.
You can insert your household spending patterns into the calculator (categories include groceries, housing, transport and leisure) and it will estimate your personal inflation rate based on the current inflation rate.
You can also provide your income and the calculator will estimate your spending on other areas based on the average spending for a household on your income level.
For the most accurate results, make sure to include granular costs for as many outgoings as possible. Make sure you consider irregular purchases e.g new car or dress, and include the average amount this costs you over a week, month or year.
The cost of living is always determined by a large number of factors. Demand is one of them, with demand for things such as energy and fuel both very high at the moment, it has driven their prices up.
In addition to this, there are still lots of shortages in some areas as a result of the pandemic, meaning that manufacturers are struggling to keep up with demand.
The end of financial support relating to the pandemic has also had an effect, as have other factors such as climate change and trade issues.
This all depends on how you define the cost of living. According to the ONS, the average weekly household expenditure was £587.90 as of 2019-20.
This figure takes into account a number of goods and commodities such as housing costs, groceries, transport, clothing and more.
The cost of living in the UK is higher than in a lot of countries, although it isn’t among the highest in the world.
Gas and electricity prices are among the costs causing the greatest concern. Again, the increase in prices comes down to supply and demand.
Providers are having to pay more to source gas and electricity and these extra costs are being passed on to customers.
These wholesale prices are at an all-time high due to factors such as Russia’s invasion of Ukraine and particularly extreme weather in some parts of the world.
The amount of Council Tax that you have to pay depends on two things: where you live, and how much your house is worth.
Each local council sets its own Council Tax rates and these are split into bands, based on the value of your home.
You may qualify for discounts or exemptions too, for example, if you’re a student, disabled, or live alone.
A private pension is a pension plan that you pay into, which will then be paid back to you after you retire.
This exists alongside your state pension and is split into ‘defined contribution’ and ‘defined benefit’ pensions.
With a defined contribution pension, the amount that you’ll receive is based on how much you contribute.
On the other hand, defined benefit pensions are usually run by your employer and are based on how much you earn and how long you’ve worked somewhere.
Fuel Duty is a tax paid on the sale of fuel used for vehicles such as petrol and diesel. It generates a large amount of revenue for the government and is charged as part of the price that you pay at the pump.
The amount you pay for Fuel Duty varies by type of fuel and for 2022-23, stands at 52.95p for both unleaded petrol and diesel. VAT is also charged on top of those too, at 20%.
With the cost of living on the rise, many people are now creating a personal budget to manage their money.
The first thing to do is calculate how much money you have coming in, after deductions such as taxes and insurance.
Next, you need to work out how much you’re spending, including fixed expenses like bills and rent, as well as variable ones like groceries and leisure activities.
Once you have an idea of your incomings and outgoings, you can make a plan and set some goals for your spending going forward.
This will likely mean that you have to adjust some of your spending habits to meet these goals and find some expenses that can be cut.
You should also make sure to review this budget on a regular basis to make sure you’re still on track.
If the rising cost of living is causing you concern, then why not check out our guides below for tips on saving money on food, bills, going abroad and more.
All data provided by Zoopla and refers to average rental listing prices as of May 2022.
Sourced from the Land Registry’s UK House Price Index, showing the average house price from April of each year.
Sourced from the Department for Business, Energy & Industrial Strategy’s annual domestic energy bills data.
Annual bills are based on fixed consumption levels of 3,600 kWh per year for electricity and 13,600 kWh for gas.
For England, Wales and Scotland, figures show the average Council Tax paid in Band D properties, sourced from the following sources:
Scotland - Scottish Government’s Average Council Tax per dwelling 1996-97 to 2022-23
Wales - StatsWales’ Average band D council tax, by billing authority
Northern Ireland uses domestic rate bills rather than council tax. The rate for each area was sourced from the Department of Finance’s poundages data and applied to average house prices (according to the Land Registry UK House Price Index).
The average cost of fuel sourced from the Department for Business, Energy & Industrial Strategy’s monthly and annual prices of road fuels and petroleum products and refers to mid-June figures for super unleaded, premium unleaded and DERV fuel.
Groceries & other costs
The average cost of several household goods and services according to the Office for National Statistics’ family spending workbook 1: detailed expenditure and trends. These figures refer to financial years.
The median annual income for all workers according to the Office for National Statistics’ ASHE earnings and hours worked, place of residence by local authority.
The median gross weekly pension income for pensioner couples, sourced from the Department for Work and Pensions’ Pensioners’ Incomes Series.
These amounts are an average over three years as there are small sample sizes for some regions.
The average weekly expenditure per person by region from the Office for National Statistics’ family spending workbook 3: family spending workbook 3: expenditure by region, subtracted from the average weekly income by region (from the Office for National Statistics’ ASHE earnings and hours worked, place of residence by local authority).
Salman is our personal finance editor with over 10 years’ experience as a journalist. He has previously written for Finder and regularly provides his expert view on financial and consumer spending issues for local and national press.