The cost of living crisis certainly feels real, but is it? How much does it cost to live in 21st century Britain? And is that more than it used to be?
The big things
Let's look at the big things first: housing, weddings, education, raising a child, retirement.
Anyone who's picked up a newspaper in the last two decades will know that buying a house costs more than it used to. But the rate of that growth is astounding. In 1993 (the earliest reliable 'mix adjusted' measures are available) the average house price was £64,000. In 2013 it was £242,000. No wonder first time buyers are having trouble getting on the ladder.
Naturally, this has a knock-on effect on rent. In the eight years between May 2005 and May 2013, private rents increased an average of 8.4%.
Estimates for the average UK wedding cost hover around the £20,000 mark - which doesn't include the cost of attending everyone else's, let alone the perpetually increasing cost of stag and hen weekends (up 50% in five years).
Raising a child to the age of 21 is now estimated to cost more than £225,000 - up 62% since 2003. The biggest chunk is education, totalling £73,803 (including a university education, but not private school). Although a large amount of this growth is due to tuition fee rises which your child will pay back themselves through the student loan system. Still, that small mercy is probably evened out by having done the same yourself, and then continuing to support one of the record number of young adults living at home past the age of 21.
Then there's the big one: retirement. It's estimated that you need a pension pot of around £300,000 for a 'basic cost of living' (accounting for state pension and other retirement benefits). Growing that amount of capital integrates generous tax relief and compound interest so you don't need to source the entire sum yourself; but using a compound interest calculator we can make a very unscientific estimate. To achieve that £300,000 you'd need to put away around £300 a month for 30 years (£108,000). At 5% interest you end with a sum of £250,717.91 - add 20% tax relief and you get £300,860.64. Still a hefty sum.
So far then, in our vague, meandering and selective survey, we're looking at £820,000 for a house, a wedding, two kids and a 'basic cost of living' retirement. Assuming you pay cash for everything. Set that against 50 years of the UK average salary of £26,500 (£1,325,000) minus 25% for tax (£993,750) and you're left with £173,750 for every day expenses.
Every day
Of course, the UK average salary doesn't tell us much - the number is too vague, and it means nothing until you set it against the cost of things i.e. how income compares to inflation.
Generally speaking, the western world at least has been in a period of relative affluence since World War Two and that is reflected in income growth. The average full-time employee's earnings increased by 62% between 1986 and 2012, taking inflation into account.
However, everything changed after the financial crash, when prices outstripped wage growth by some margin. Between 2007 and 2011, everyone but the richest 1% saw negative wage growth in real terms (adjusted for inflation).
Unsurprisingly, the result was a net decrease in disposable income across most of the population. And less disposable income means less money available to put into grow that £820,000.
Wage inequality
But it may be even worse than it seems. The trouble with using average figures like the ones we have, is that they are too broad, they obscure internal differences. And income growth inequality has been an expanding problem across the western world for the last few decades.
Although UK incomes have risen 62% in the past 25 years, the top 10% saw growth of 81% and the top 1% growth of 117%. The disparity grows exponentially, skewing the median figure upwards, giving a distorted impression of how good income growth really is.
Add in the government's neat accounting trick of comparing income growth to the Consumer Price Index (CPI) measure of inflation rather than the higher Retail Price Index (RPI) which also includes housing - which we almost all pay for in one way or another - and things don't look so rosy.
So yes, when it feels like everything is more expensive, even when you're told you should be feeling flush, it's not just your imagination.
Image: Magnus D