As the cost of living continues to squeeze budgets, financial experts have outlined six practical steps for UK households to combat the ongoing impact of inflation. The latest official figures show the Consumer Prices Index (CPI) inflation rate stood at 3.6% in October 2025. This means an item costing £100 a year ago would now be priced at approximately £103.60.
Understand and Calculate Your Personal Inflation
The first and most crucial tip is to understand what inflation means for your specific circumstances. Rather than relying on the national average, individuals are urged to find their 'personal inflation rate'. The Office for National Statistics (ONS) provides a free online calculator for this purpose. It allows you to input your actual spending habits to see how quickly your own cost of living is rising, which can be significantly higher or lower than the headline rate.
Tackle Food and Energy Bill Hikes
Targeting specific areas of high expenditure forms the core of the advice. While overall shop prices were 0.6% higher year-on-year in November (down from 1% in October), food inflation remains a key pressure point. It slowed to 3% from October’s 3.7%, driven by promotions in sectors like dairy, fruit, bread, and cereals. Actively seeking out these promotions and switching brands can help beat food inflation.
Energy bills also represent a major outgoing. The advice recommends regularly comparing tariffs and suppliers to ensure you are not overpaying, as even small percentage savings on these large bills can make a substantial difference.
Seek Better Savings and Consider Investments
With high street savings accounts often offering interest below inflation, moving your money to an inflation-busting savings account is essential to prevent your cash losing value in real terms. Furthermore, for those with the capacity to accept risk, considering investments such as shares or commodities like gold could provide a potential hedge against inflation over the longer term, though professional financial advice is always recommended.
Helen Dickinson, Chief Executive of the British Retail Consortium (BRC), noted that intense retail competition led to early Black Friday deals, helping to keep prices in check. "Retailers are hoping that consumer confidence rebounds in this crucial trading period and they will continue doing everything they can to keep prices down," she stated.
However, Dickinson also issued a warning for the year ahead: "Headwinds in the new year include rising employment costs which are likely to filter through to prices. This could shake already weak consumer confidence and present further challenges for consumers."
Mike Watkins, Head of Retailer and Business Insight at NIQ, echoed the need for caution, saying, "It’s good news for shoppers that price increases are slowing but inflationary pressures still remain, in particular within food." He added that retailers would need to limit price rises in the Christmas run-up to attract spending.
