How to live well on small income in UK
Living on a small income is one of the challenges a lot of people face in the UK. The question “how to live well on a small income in the UK” is the question a lot of people ask because of the constantly rising cost of living.
If you ask me how to live well on a small income in the UK, I will say it is possible through being clever and making wise decisions with your small income.
The median average annual income in the UK is around £28,677. A lot of people earn far less than this average.
The cost of living is not very prone to fluctuation. If you know what inflation is, you possibly understand that it is one of the reasons why a lot of people struggle financially because income does not keep up with the rising in cost of day to day expenses.
Increase your income
This is counter-intuitive. I do not want to lose anyone here. I am going to give you a lot of useful suggestions in this article about living well on a low income.
However, I want to address the root of low income first. I like to believe that anyone on a low income if giving the option will like to increase their income.
That is the reason why the first thing I will suggest to you is to think about ways to increase your income. With the internet these days, it is possible for anyone living in the western world to start a side business separate from their normal source of income.
Starting a side hustle is one of the best ways to increase your income. Another option to increase your income is to significantly increase your value in the marketplace by improving your skills or learning new skills that relate to your current profession.
An example is someone who currently works as a care assistant in a care home or hospital, you could go and train to become a nurse, by doing this you will be able to earn more.
Another example is a software tester, you could take some time to learn programming and become a software developer.
Shop around for everything
This may sound obvious, but the truth is, not a lot of people shop around when they want to buy household things. There is no point in being loyal to a shop or service provider. By being loyal you will be giving money you don’t have away.
I always shop around for things like car insurance, home insurance, gas and electricity. It is very simple to use comparison websites to get a lower price for a lot of things.
In my household, we are not loyal to any particular supermarket. We shop at various supermarkets. One great tool that we’ve found very useful in my household is the mySupermarket app.
The mySupermarket app can be downloaded from the app store or google play. The app will help you see the current price of a particular item from the big supermarkets.
There is always a price war between the supermarkets like Tesco, Asda, Salisbury, Aldi, Lidl and the others.
You can also use mySupermarket on desktop. You can fill up your basket online and you will be able to see which of the supermarkets will be the cheapest to buy from.
This helps you to compare the price of items from the big supermarkets.
For example, instead of buying a large detergent from the supermarket you usually shop from, you can check on the app, you could find it cheaper in another supermarket.
Make use of free things
Before you spend money on anything, always think about if it’s something you could get for free first.
A very good example is buying books for yourself or for children. In my household, we make use of the library a lot. Whether your income is big or small, everyone pays tax, your tax is used to provide a lot of services that are free for the public including you.
So why not use your local library instead of buying books? You can keep the money in your pocket.
There are a lot of websites or apps you can use to find something free instead of paying for it. The most popular one is Facebook Marketplace where you can find items for free. It doesn’t take long to quickly check whether an item you want to buy is being offered free by someone on Facebook from your local area.
You could find a local group in your area where people give things they no longer need away for free. One of those websites you can use is FreeCycle.
Aside from free stuff, you might be able to buy some items at very cheap prices from church sales or car boot sales. There is no point paying a lot of money for gardening tools when you can get them at cheaper rates from car boot sales in your local area.
Rent or Mortgage
Accommodation cost is one of the biggest expenses for most people. Whether you are renting or paying a mortgage. There are ways to reduce your accommodation cost.
What we’ve done regularly in my household is to look for new deals whenever the deals we have on our mortgage ends. By doing this, we usually reduce our monthly mortgage repayment. A very important website that has been very useful for us over the years is MoneySavingExpert
As a homeowner, you can also consider having a lodger if it’s not going to be a problem for your household. If you are a family with kids this might not be something to be considered. If you are single this might earn you extra income monthly.
For someone who is renting you might consider renting a smaller apartment instead of a big house to bring the cost of your accommodation down.
There are various ways to save money on Council tax. However, this depends on your status. I remember when I was a student living with my sister. We were able to ask for a reduction from the Council because of my students status. Sometimes if you don’t ask you won’t get it.
Some of the people that can get a reduction on their Council tax apart from students or someone living with a student are:
- some low-income earner
- people living alone or are the only adult in the house
There is a good resource on the Money Advice Service website you could explore.
However, the best way to find out if you qualify for a reduction is to contact your Local Council
Shopping, Eating Out and Day Out
Depending on which organisation you work for. There are a lot of incentives that most employees don’t know about.
When I was working for the Local Government. It wasn’t until about 5 years later that I found out we could register for an organisation called CSSC as a Council employee.
CSSC is not only for Local Government workers, but most public sector employees can also use CSSC. I used to save money on fuel buying from Tesco using the CSSC card.
With CSSC you get a lot of discounts from a variety of shops from fashion, groceries, homes and dec, holiday, day out, eating out and a lot more.
Another one I found out about recently is the Blue Light Card which is a discount service for the Emergency Services, NHS and Armed Forces.
You just need to ask your employer about any incentives they have that you can sign up for which will help you save money on shopping, eating out and day out.
I have been able to save a lot of money over the years using cashback websites. There are few of them which you can use.
By doing this you will be getting some cash back, therefore, saving money.
Gas and Electricity
There are a lot of savings to be made from your utility bills. A lot of companies charge far too much.
For most of these big companies who charge too much, a lot of their running cost comes from advertisements and paying dividends to their investors.
There are other smaller energy companies that have much lower tariffs. If you are on a small income, you should consider switching to smaller energy companies that can save you some money.
Water supply is one of the areas where there are not a lot of competition because a particular water company is the only one supplying a particular area.
It can be a bit difficult to switch to another water company. You might consider checking that you have a water meter so you can only pay for what you use and not estimate.
You could ask your water supplier if they can install a meter for you if you don’t already have one.
Another way to reduce your water bill is to check if you qualify for assistance from WaterSure.
WaterSure is a scheme put in place to help people with their water bills. According to WaterSure, to qualify for their scheme, you must be on benefits and need to use a lot of water either for medical reasons or because your household has a certain number of school-age children.
Subscriptions and TV License
The human being can survive without entertainment and this is the truth. However, entertainment is now a fundamental part of our lives. But seriously, entertainment doesn’t have to cost a fortune.
As someone on a low income, there is no need to have Sky and Netflix at the same time. You might consider just having one of the two to save money. What about Amazon prime? I made a video on my YouTube channel where I discussed the benefits of amazon prime that a lot of people are not using.
If you are a prime member, Prime TV might be enough to entertain yourself. If you are a football fan like me, Amazon Prime does have some Premier League fixtures.
For people that are Sky fans, you can subscribe to the only thing you need and not have the full package.
People are now watching less of the traditional TV channels like BBC, ITV and Channel 4. If you don’t watch TV channels, you don’t need to pay a TV License. That is some savings for you because it costs around £150 a year. I still watch some documentaries on catch from TV channels so I am still paying for it. For some people, they might save money if they don’t watch TV channels.
This is one of the expenses that can take a large percentage in most people’s budget. Moving from point A to B doesn’t have to cost a lot of money and doesn’t require a new car. If you are on a small income, you need to understand you can save money by not driving a new or expensive used car.
In my household, we use the approach of going for a functioning car, not an expensive car. We’ve been able to save a lot of money over the years because of driving an older car.
You might want to consider an electric car when next you want to change your car. Electric cars are gaining a lot of popularity because they are cheaper to run.
Nissan Leaf is one of the electric cars that started the electric car revolution in the UK. You might want to try it out.
The cost of a monthly mobile phone contract can put a hole in your finance if you are not careful. For a number of years, I have used Mobiles, a cashback website for mobile phones to secure cashback on my mobile phone contract deals.
Another trick to reduce your mobile phone contract bill is to ring your provider when your contract is nearing its end.
You could say you want to switch to another provider. Usually, they will try and give you a cheaper offer to let you stay.
This has happened to me many times. These companies always try as much as possible to keep the customers they have.
Personally, I have been using cheap broadband without a landline.
I have been using the broadband for a few years and have been happy with their service. Again, Money Saving Expert is a very useful resource where you can see current information related to Broadband Deals.
Car and Home Insurance
The most important rule here is never to auto-renew your home or car insurance. The insurance company always reward new customer not an old customer.
I remember a few years ago, I rang our home insurance provider after we received our home insurance renewal letter. The premium was £115. I rang to check if they can offer a better deal. They offered me £93.
There are two things to note,
First, if I didn’t ring I would have paid £115, that’s loosing £22. The second thing, I shopped around and found a deal with another provider for £71 which was even cheaper.
The point is, always shop around, there are a lot of comparison websites that you can use to find a good deal for your home and car insurance.
I have been able to find good deals for my car insurance. My car insurance is very cheap at £271. This is because of a long number of years of no claim bonus and also the fact that I always use comparison websites to find deals.
Some of the comparisons websites are CompareTheMarket, Confused, GoCompare.
Exercising and Gym Membership
Part of my values is exercising and I like to do it on the cheap.
For people that like to keep in good shape or want to lose weight. It is important to note that there is no magic formula or trick that will do it other than eat less and move more.
Moving more for me doesn’t have to cost more than a pair of trainers and cloth to put on for running or walking out.
I am in good shape and I have never registered for any gym membership in my life.
I am not saying it is wrong to register for a gym membership. For people that are on low income, I think it might be a way to save money.
Personally, I like going for a run because I have the opportunity to enjoy the natural fresh air and also I do not need to pay anyone to do it.
What if you are on low income and you need to register for a gym membership or you enjoy a particular activity or sport which you need to subscribe for?
A lot of gyms have day pass which could be as cheap as £4.50. Instead of a monthly subscription, you do not use, you could consider day pass which means you can go any day you feel like.