Support Your Clients as the Cost of Living Crisis Bites

Many of your clients will be looking on with alarm as they see food, fuel and energy prices shooting upwards, as the numbers are striking and worrying in equal measure. 

For example, inflation jumped to 5.4% in December - its highest level in nearly 30 years - and it could rise higher still, as some analysts believe it could reach 6 or 7% in the coming months.

Meanwhile, energy prices are set to go up by more than 50% when the energy price cap increases by £693 on April 1st, and according to the AA, petrol prices hit a record high last weekend, reaching an average of 148.02p per litre.

Add to that a planned 1.25% hike in National Insurance in April, which the government sees as the best way to ease pressures in health and social care, and you have a very real cost of living crisis for many households and families across the UK.

That means some of your clients will increasingly rely on you for advice and support to help them through what’s likely to be a very stressful period.

So, you should spend the next few weeks pre-empting the questions they are likely to ask over the coming months, such as ways they could possibly save money. This could include:

Encouraging clients to build a financial plan

This should be a straightforward overview of their costs and income, reflecting everything from their mortgage payments and investments to pension payments and existing debts.

When a client has a clear idea of what’s coming in and out, they’ll be in a much better position to identify where savings can be made, how much money can realistically be put aside for emergencies and whether they’re in a position to achieve wider financial goals.

Remind clients that a financial plan should be a live document, which means it has to be reviewed and updated on a regular basis so it remains fit for purpose.

Help clients find potential money savings 

Although prices are going up across the board, your clients could still be able to make small savings by thinking about where money might be being wasted. 

For instance, are they paying for more data on their phone contract than they need? Are they paying for services they don’t use often enough to justify keeping it, such as TV or music streaming platforms? Do they fill the kettle to the top even if they’re only making one cup of tea?

Encouraging clients to think about where they’re possibly wasting money could transform their attitude to managing their finances and help them be much savvier about what they’re spending in the long term.

There are many online tools to help people take control of their household spending, such as the MoneyHelper tool, provided by the Money & Pensions Service.

This free Budget Planner has helped many thousands of people get a grip on how much they’re spending, breaking down how much of their income is going on bills, living costs and other expenses, and providing handy tips on how they can make the most of their money.

Help clients change how they spend money

One reason why many people end up in financial trouble is that it’s easier to spend money now than ever before. For example, websites remember your card details, and if you’ve got your log-in details on the site saved, you can easily spend lots of money on non-essential items in just one or two clicks, without even thinking about it.

Now may therefore be the time to encourage clients to make it harder for themselves to buy items online, perhaps by telling them to sign out of their accounts or not save their card details. That would mean they have to think more about what they’re doing and how much they’re spending before they click on “Buy”. 

It’s easy to feel you’re not really spending money if you’re not physically handing over your hard-earned cash, so anything that encourages people to think more about the money they’re spending could improve their spending habits immeasurably.

Mortgage holidays for eligible clients

If a client is worried about the state of their finances, they might be eligible for a mortgage holiday and use the money saved on their mortgage repayments to pay off other debts. However, you should only suggest this if it’s absolutely necessary, as this can be a costly option in the long term.

Clients may approach you asking about this option, so make sure you’re familiar with the latest rules, terms and requirements, so you can answer their questions accurately and comprehensively.

Check in with your clients

Even if your clients don’t directly approach you asking about cost of living issues, that doesn’t mean you can’t proactively get in touch with them first. A regular phone call or email, perhaps pointing them to resources about how to save money, could make a huge difference to your clients, both financially and psychologically.

So even if they decide they don’t need to speak to you about the burgeoning cost of living crisis, your clients will know that you are there for them if they need you.