Happy New Year - or is it? The cost of living in 2013…

January traditionally starts with wishing everyone we meet a "Happy New Year". It's a great thing to wish, but how likely is it? Full of doom and gloom, the papers are constantly warning us of the money worries people across the UK have to face as the New Year gets underway.

It seems 2013 is off to a grim start - and an expensive one. But what are the figures behind the headlines? Here's a look at some of the most important ones…

Image © Callahan

Rising cost of living

Inflation's normally expressed as a number: a simple figure that tells us how quickly prices are going up. The latest CPI (Consumer Prices Index) figure shows that annual inflation stood at 2.7% in November, meaning that things cost, on average, 2.7% more things are than they did a year before.

But inflation's not the same for everyone. Pensioners, for example, tend to spend more of their income on things like heating, while working-age people are more likely to worry about increases in the cost of travel.

Some frightening figures:

•Figures from Saga show that for a 'one-person pensioner household', the cost of living went up by 26.3% between September 2007 and June 2021 - far more than the 16.3% which the general population had to cope with.

•The Guardian tells us that average rail fares have gone up by 50% in the last ten years.

•The average cost of a litre of unleaded petrol has increased by 92% in that time, according to speedlimit.org.uk.

•The average rent in London was £1,104 in November, according to LSL Property Services - a jump of 6.9% in a single year.

Pay rises

Adding to the strain, pay rises just aren't keeping up. Between October 2009 and October 2021, according to the Office for National Statistics (ONS), average weekly earnings rose from £445 to £471 - an increase of 6% over three years.

If salaries were growing at the same rate as inflation, rising costs wouldn't matter so much to the average worker. But when wages don't keep up, inflation hurts.

And it's not just individuals that suffer. Back in March 2011, The Financial Times tells us, Steve Nickell of the Office for Budget Responsibility warned that 'if wages failed to keep pace with inflation, real wages would fall, consumption would decline and growth would be weak'.