“I sort of assumed the cost of living crisis would be temporary and things would go back to how they were before,” says Jess Daly. “Maybe I was being naive. Everything is just expensive now.”
Jess and her husband, Jon, first spoke to the Guardian about their soaring bills in 2021 and the couple, who are careful budgeters and keep a spreadsheet of expenditure, have shared updates on their experience. The squeeze has been the soundtrack for big life events: a new baby, April – a sister for three-year-old Robin – arrived in April, of course, and there has been professional upheaval too.
Jon managed to get a better job and a welcome pay rise at a large financial services firm this year, while Jess, now on maternity leave from her role as a library administrator at the University of East Anglia, survived last year’s job cuts. Worryingly for her, though, her employer needs to make fresh cuts and cannot “rule out compulsory redundancies”.
The Dalys were on tenterhooks before Labour’s first budget in 14 years. They have had an offer accepted on a bigger house in Norwich for their growing family and are nervous it could send mortgage rates higher. The jury is still out after UK government borrowing costs rose in the budget’s wake.
“I’m constantly checking websites to see the latest rates,” says Jon, mindful of the mortgage meltdown during Liz Truss’s brief reign.
With no outside space in their current home for the children to play in, the couple are moving to a semi-detached house with a garden and prized off-street parking. It is a mile away from where they are now and a “manageable doer-upper” that will test Jon’s DIY skills, including an ambitious plan to fit a new kitchen.
His pay rise helped them to secure a bigger home loan but the couple have not “maxed out” their borrowing. In an uncertain property market their below-asking price £325,000 offer was accepted, while their three-bed terrace was eagerly snapped up at the asking price by first-time buyers. The move is pencilled in for February.
With two kids and a cat called Polly, the couple in their 30s are a good proxy for many in Britain. “I saw a statistic that our pay equates to the average household income with two earners, and that the house we’re buying is around the average price, too,” Jon says.
“I know that for a lot of people on average wages like us, buying the average house is impossible,” he says. They got on the ladder with the help of the bank of mum and dad, and without the equity built up over seven years “there’s no way we could afford this new house”, he says.
They have a mortgage rate offer at just under 4% and the sums show monthly payments increasing by about £450 to £1,100 a month after the move. It’s a big step up but Jess points out it would be hard to find anywhere for a family to rent in Norwich for less than that amount.
“With Jess being on mat leave, we are budgeting for quite a tight 2025,” Jon says. “The last few months of her leave are unpaid and will coincide with higher mortgage repayments and the renovation costs.”
After their mortgage another big outlay is childcare. With their eldest child, Robin, they missed out on the 30 hours of free childcare a week that is promised to working parents of all children over the age of nine months from 2025. But when April goes to nursery next year this will make a massive difference.
“We still have childcare to pay for but it’s not going to be anywhere near the financial burden that it was when we had Robin,” Jess says. “For those two years from age one to three it was a huge chunk of our income. At its highest, it was about £475 a month and that was with help from our family.” The cost is now £200 as even with an extra half-day, after turning three Robin qualified for government-funded hours.
Pretty much everything has gone up in price over the past three years, from utilities, food, petrol and insurance to Polly’s vet bills. Expensive is the new normal, Jess says. In September, headline inflation fell below 2% for the first time since 2021 (it had been on a downward trajectory since hitting a peak of 11.1% in October 2022) but there is always something. They just forked out £300 to get their Nissan Note through its MOT and know they will have to buy a bigger car soon.
Grocery price inflation peaked at 17.5% in 2021 and is now running at 2% but outliers remain. Olive oil, for example, now costs more than £9.12 a litre, with prices up 42% year on year, according to official data. After all the shocks, Jess says their “outgoings have levelled off. It’s more predictable.”
With two young children there are not many nights or even meals out. “We went to Pizza Express not long before April was born, and it cost us 70 or 80 quid,” Jess says. “I was really shocked at how much it had gone up in price because it had been such a long time since we’d gone out for a meal.”
Energy bills have since eased from their peak in 2023 – when the Ofgem price cap reached £4,279 but the government subsidised bills to keep them at £2,500. The current cap is still £1,717 a year but it is possible to find a cheaper deal. In the spring the Dalys secured a 12-month fix with British Gas.
At its zenith the energy bill for their three-bed terrace home was just over £200 a month but they report that with the “fix” it is now £104. It is a big improvement but not back to pre-crisis levels. In 2019 their direct debit was only £45.
A Labour government brought optimism to many households even if no one is predicting living standards will take off. Indeed, the grim prediction is the budget’s policies will leave the average family £770 a year worse off in real terms in five years’ time, according to the Joseph Rowntree Foundation.
“I’m hopeful Labour will better protect the public services that as a family we’re going to rely on,” says Jess, adding that “it is a bit early to tell”.