Can Technology Combat the Cost of Living Increase?

The cost of living in the UK is constantly rising just as it is everywhere in the world, but is it always the case that everything around now costs more? In April 2016 the government introduced the National Living Wage for all people aged 25+. Designed to replace the minimum wage for those who are more likely to have household bills and a family to support, the £7.20 per hour minimum was designed to meet the current costs of living in the UK.

While many have argued that the hourly rate is still too low to afford people an acceptable standard of living, the innovation is a clear sign that government is trying to address the issues faced by many. To illustrate the point, the average cost of a basic standard of living in the UK back in 2008 was £13,400 according to research by the Joseph Rowntree Foundation. In contrast, the 2016 stats suggest that the average family needs to earn at least £24,801 each year just to meet the minimum standards of living.

Costs Continue to Increase but Not in All Instances

For those trying to raise a family, the prospect of having to earn £24,000 minimum can be daunting one, but it’s also worth noting that price increases aren’t a universal phenomenon. In fact, thanks to modern technology, the cost of some of life’s luxuries has actually decreased over the last decade.

According to a report by Voucherbox, items such as TVs, laptops, phones and even taxi rides actually cost less now than they did in 2006. For example, if we look at the cost comparison chart we can see that mobiles have come down in price by almost £150. In 2006, a top-of-the-line Motorola Razr V3 cost £500 brand new. Today, the infinitely more powerful iPhone 5S can be picked up for £359.

Similarly, the average cost of a laptop in 2006 was £700, but in 2016 you can pick up a portable device for £300. Of course, as technology matures and companies compete for a share of the market, prices drop. However, that’s not the only reason: if you take the cost of a taxi ride, you can see that technology has actually helped people save money.

Thanks to companies like Uber, the average cost of a trip according to Voucherbox’s research is now £60 compared to £70 (traditional taxi) back in 2006. We know the price of petrol hasn’t decreased in that time (it’s actually risen from 89.4p per litre in Jan 2006 to 101.9p in January 2016), so it must be something else causing a decrease.

Technology May Offer a Solution

Uber has basically blown the taxi market wide open and allowed commuters to connect with more drivers. This increase in availability has driven down the cost of a taxi journey in spite of the increase in fuel prices. Although an isolated example, Uber has shown that technology has the power to decrease the cost of living. In fact, when you take into account innovations such as comparison sites that allow customers to find cheaper energy, holiday and insurance deals, there’s a lot to be hopeful for.

The overall cost of living may continue to rise, but technology can certainly help those at the lower end of the earning spectrum. Of course, government intervention is always important, but there are clearly ways in which technology will continue to cut costs in certain areas of our life.