Inflation remains major worry for families in 2025

Rising costs continue to be a big worry for parents with children under 18 at the start of the new year.

In a survey by Confused.com Life Insurance, nearly two-thirds cited inflation as their biggest economic concern right now.

That’s understandable after a year of being squeezed in many different areas, such as: 

• groceries and household essentials - 60%
• utility bills - 56%
• transport costs, such as fuel and public transport - 28%
• family holidays or outings - 25%
• home upgrades and renovations - 18%
• savings and investments - 17%
• childcare - 16%
• children’s extracurricular activities - 15%

Could interest rates be cut?

The rate of inflation actually fell to 2.5% in December 2024, down from 2.6% a month earlier.

Of course, that doesn’t mean prices are coming down, and inflation still remains above the Bank of England’s target of 2%.

Nevertheless, it raises hopes that another key economic concern among parents could be addressed in the next few weeks.

Almost half of the mums and dads surveyed named interest rates as another big worry for the year ahead.

But many analysts believe last month’s drop in inflation clears the way for Bank of England to cut interest rates in February.

Last month, the Bank of England decided to keep interest rates on hold at 4.75%, but some experts are now predicting a cut to 4.5%, and possibly a second reduction later in the year.

Three-quarters worried about UK economy

More than three-quarters of parents polled by Confused.com Life Insurance are currently worried about the UK’s economic outlook over the next five to ten years, with one in three admitting they’re “very concerned”.

Amid gloomy headlines of sluggish growth, a weakening pound and high government borrowing costs, this is unsurprising.

But away from the front pages, the economic climate has a very real impact on people’s lives, decisions, and their ability to plan ahead.

For example, 59% of parents said they’d taken steps to save for their children’s futures through life insurance, investments or savings.

But 38% said a shortage of disposable income is stopping them from going further.

And worryingly, 32% said they believe their children have worse financial opportunities than they did at the same age.

Help is available

If you’re finding it hard to manage day-to-day expenses and plan for the future, then don’t suffer in silence.

We can help you with everything from budgeting to making sure you’re getting all the benefits you’re entitled to, as well as advising you on debt solutions (some are free, for others there’s a fee).

All of our debt advice is free and impartial, and you can access it online 24/7 or over the phone during our office hours - call us on 0161 518 8285.