From petrol prices to mortgage rates, the US-Israel war with Iran has already had an impact on people’s finances in the UK, and it only looks set to continue.
The oil price is up 35 per cent since the conflict started at the end of February, flowing not just into the obvious associated costs – putting petrol and diesel in your car, heating oil – but also most goods we buy, as they need transporting, cooling, storing and more. And things like fertiliser, a hike which is already reportedly hitting British farmers growing our food.
The price of gas, which affects energy bills, is up 70 per cent. While its impact won’t hit imminently, it is storing up bill rises for later this year. There is no quick fix for consumers, but experts say there are some steps you can take to reduce the impact on the cost of living over the coming months.
Need a mortgage? Lock in your rate now
Mark Harris, chief executive of mortgage broker SPF Private Clients, says that while earlier this year, the markets expected two or three further cuts in base rate over the next 12 months, since the Middle East conflict broke out, creating fears of rising inflation, market expectations are that those reductions won’t happen, and there is a possibility that base rate may have to rise. The effect has already been seen in the market, with the typical mortgage taken out now £788 a year more expensive than before the Iran war began, new data has revealed.“Those coming up to remortgage or take out a new deal in the next six months should take action now. You can secure a rate and then if the situation improves and rates fall by the time you need the mortgage, you should be able to switch to a cheaper deal. However, if rates rise in the meantime, you will be glad you took action when you did,” says Harris.
Lowering your thermostat could save £270 a year
Stephen Hankinson, heating expert at Electric Radiators Direct, says it’s important to check your thermostat as soon as possible after the clocks spring forward on 29 March to ensure it’s ready for spring temperatures.Of course, while it may be spring, that’s no guarantee that there won’t be another cold snap, so if you do worry about cold mornings, Hankinson says just reducing your heating temperature by 3C can help save on energy bills. “In fact, going by the latest average usage figures, dropping from 21C to 18C could save over £270 a year.”
Avoid standby mode
Leaving appliances on standby consumes energy. Turning electrical items like the TV, toaster, games console, speakers and kettle off at the plug while they aren’t being used saves energy.You may think the savings would be negligible, but according to the Energy Saving Trust, turning off electrical appliances instead of leaving them in standby mode could save you up to £55 a year.
Take a meter reading on 31 March
You may be worried about the energy price cap increasing in June, but there is some relief in the meantime, as from 1 April, the average annual gas and electricity bill will drop 6.6 per cent from £1,758 to £1,641 for a typical household. But without an accurate meter reading, energy suppliers may estimate usage – meaning some customers could still be charged at the higher rate. If you take an up-to-date reading, it means that you will be charged at the lower rate from the moment it kicks in.And those looking to fix their energy unit price instead are facing a similar situation to people searching for a mortgage. Some energy tariff providers have pulled money saving deals, or have now set them at a higher price. Geopolitical uncertainty also means there are likely to be fewer deals with a longer duration.
Make sure your fridge freezer is the correct temperature
Gareth Kloet, energy expert at Go.Compare, says to double-check your freezer settings, as you may be burning through energy unnecessarily. “Fridge freezers are always on, and account for 13 per cent of the average household’s energy bill, so making sure they’re working as efficiently as possible is a good way to make sure you’re not wasting energy. “The Food Standards Agency says you ought to keep your fridge at 5C and your freezer at -18C which you can usually adjust using the built-in temperature dial.”
Use a cold setting for laundry
Kloet says that if you can use a lower temperature in your washing machine, you will use less energy. “Which? found that lowering the temperature on your machine from 40C to 20C can reduce running costs by around 62 per cent, a significant saving when you add it up over a year. If your appliances have them, use ‘eco-mode’ as this uses less energy even if on for longer.”
Spend less time in the shower
Think you could manage to shower in four minutes? The Energy Savings Trust says keeping your shower short could save you £45 a year on your energy bills. A tip on how to maximise your shower time (as someone who has mastered the super speedy shower): apply shampoo to hair that has been lightly spritzed with water before you turn the shower on. This will allow you time to lather up without wasting time and water in the shower.
Batch cook
Batch-cooking can be a great way to save time and money. Buying ingredients in bulk for your cooking is often cheaper, and by batch-cooking for the freezer, you’ll have more than one meal ready in advance and avoid the lure of takeaway. In fact, research by Lidl, conducted for the Channel 4 show Batch from Scratch, says that families can save around £6,700 and 410 hours over their lifetime by cooking meals in advance.
Check out the prices before you fuel up
Since the conflict started, the average price of petrol has leapt up by 10p/litre and diesel by 20p/litre. Not all-time highs, but the highest for a year on petrol, nearly two years for diesel. Prices can vary hugely even within a small area, so use the site PetrolPrices.com to find the cheapest fuel costs near you.
Replace your outdated appliances
If you’re trying to save money, the last thing you’ll want to do is fork out on new electricals, but as Ian Palmer-Smith, appliance repair expert at Domestic & General, says, it will pay dividends in the long run: “Old appliances are often a big culprit when it comes to reduced energy efficiency. Consider investing in new household appliances that already use a large amount of energy, such as dishwashers, fridge freezers, and washing machines.”
Think about switching to a hybrid or electric car and installing a home charger
If you’re thinking of buying an electric car (EV), mechanic Tyler Brown says it’s best to get a home charger installed, since public charging points are much more expensive and you may not always find one nearby. The cost to charge your car at home can be as low as 7p per kilowatt hour (p/kWh) compared to up to about 85p/kWh per kilowatt hour using a public rapid charge point.If you’re undecided on whether an EV is right for you, Zap-Map has a journey cost calculator that lets you compare individual petrol or diesel cars against electric cars, based on the price you pay for petrol and how much you pay for electricity.
Need a new passport? Renew before 8 April
If you’re due for a passport renewal, don’t delay. From 8 April, passport fees are set to rise from £94.50 to £102. It’s the third year in a row that prices have gone up, meaning Brits will now pay 24 per cent more for a passport than they did when renewing back in January 2024.And it gets worse if you apply by post, with fees jumping from £107 to £115.50 for adults. Kids aren’t spared either, with children’s passports rising from £61.50 to £66.50 online, or from £74 to £80 by post.
Plan your summer holiday now
Laura Carden-Lovell, travel expert at Transfer Travel, says that given the ongoing situation in the Middle East, it may be a good idea to start planning early. Carden-Lovell says, “With prices rising and some of Europe’s most popular spots getting busier and more restricted, you can often find better value by looking at alternative destinations. Swapping Santorini for Milos, Venice for Treviso, or Dubrovnik for Cavtat means you get a similar experience for less, and with fewer crowds.”Even during the summer, the best way to save money is to stay flexible. Travelling midweek instead of at the weekend, or choosing less in-demand flight times, can make a noticeable difference.
Consider a holiday resale site for a bargain break
Sites such as Transfer Travel, which is touted as eBay for holidays, are peer-to-peer online marketplaces where users can sell their unwanted travel plans to others looking to travel. You may be able to bag yourself a last-minute deal from someone who can no longer make their trip, or take advantage of someone selling an expensive travel voucher for less than half its value. Sounds too good to be true? The site checks that all listings submitted have no outstanding balance and the seller has provided booking confirmation to confirm they are legitimate and genuine.
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