--- title: "Cost of living crunch | Pensions Advice UK" url: https://pensionsadviceuk.com/cost-of-living-crunch/ description: "Chancellor Rishi Sunak has been forced to announce an emergency £350 of support per household to help with the cost of heating. As a result, almost half (4" last_updated: 2023-10-16 publisher: "Pensions Advice UK (a trading name of GAP-GNX Ltd)" language: en-GB --- Guide # Cost of living crunch Last updated 16 October 2023 ## Cost-of-living crunchSavers still recognise the importance of long-term planning #### Savers still recognise the importance of long-term planning ### Britain’s cost-of-living crunch has hit the country hard, with inflation at its highest level in three decades, petrol prices spiralling, retail price increases rising to their highest levels in ten years and, most recently, Ofgem announcing a 54% price hike in energy bills affecting 22 million households. Chancellor Rishi Sunak has been forced to announce an emergency £350 of support per household to help with the cost of heating. As a result, almost half (47%) of those not retired say that they cannot afford to save right now due to the rising costs of everyday living, a new survey has revealed[1]. **Immediate future** The news comes following widespread reports of many UK households struggling to make ends meet following higher inflationary pressures – sending everyday bills soaring – as the country tries to recover from the effects of the COVID-19 pandemic. Yet despite the concern about saving for the immediate future, savers are still recognising the importance of long-term planning and having a suitable pension in place for when it comes to retirement. **Relatively comfortable** The survey – which took place at the start of this year – also found that around a third of people with a pension said that they spent some of their time over Christmas reviewing their finances, including their pension (31%). This was especially true for those aged 18-34 years old (41%) compared with those aged 55+ (24%). Overall, just 5% of Britons describe themselves as being ‘very comfortable’ financially. Two in five (39%) are relatively comfortable, while a third (34%) say they can normally cover essential costs but don’t often have money for luxuries. One in seven (14%) say they can only just afford their costs and struggle to make ends meet, and 3% say they cannot afford their costs at all and often have to go without essentials, like food and heating. **Fundamental misunderstandings** Around a third (32%) of those surveyed said they could afford to contribute more to their pensions now in order to boost their retirement income. But while savers are seeing the value of pensions, the survey discovered that there remains a number of key fundamental misunderstandings by savers about their pensions, with many unsure how their contributions were being invested on their behalf. The survey also revealed that only a third of people know the minimum contribution rate that people make via Automatic Enrolment. Additionally, around two-fifths (39%) are not sure if the government gives tax relief on their pension contributions and around a third (31%) are unsure if their pension savings are invested in stocks, bonds or other investments. **Source data:** *[1] Pensions and Lifetime Savings Association (PLSA) research conducted by Yonder Data Solutions from 10/01/22 to 11/01/22 with a nationally representative sample of 2,093 adults[2] https://yougov.co.uk/topics/politics/articles-reports/2022/02/04/cost-living-crisis-four-ten-britons-expect-their-h* ### Would you like to speak to an adviser? Tell us what you need help with and we’ll introduce you to an FCA-authorised adviser. It’s free to enquire. [Get started](https://pensionsadviceuk.com/qualified-advice-request/) ### Important information This content is for information only and should not be considered legal, tax or financial advice. Pensions Advice UK is a trading name of GAP-GNX Ltd. We are not authorised by the Financial Conduct Authority and act solely as an introducer. The value of pensions and investments can fall as well as rise, and you may get back less than you put in. Tax rules can change and depend on your circumstances. ## Speak to an FCA-authorised adviser Tell us what you need help with and we’ll introduce you to a qualified specialist. Start your enquiry 020 3778 0939 We’re an introducer, not an adviser. [Call us](tel:+442037780939) [Enquire](https://pensionsadviceuk.com/qualified-advice-request/) --- Pensions Advice UK (a trading name of GAP-GNX Ltd) connects UK residents with FCA-authorised pension advisers and pension tracing services. It is not FCA-authorised and does not give financial or tax advice. It acts solely as an introducer to FCA-authorised firms, who provide any advice and explain any fees before you proceed. This is the text version of https://pensionsadviceuk.com/cost-of-living-crunch/. More pages: https://pensionsadviceuk.com/llms.txt