Page last updated at 12:20 GMT, Monday, 19 January 2009

Squeeze panel: Karen Norris

Karen and Clive Norris with their two children
Age: 42
Job: Housewife
Salary: 15000 - 20000

Karen Norris is 42 and is a housewife from Peterhead in Scotland.

She is married to Clive and they have two daughters, Elspeth, five and Karah, who is one.

Falling interest rates affected the Norris family as the value of their pensions and their children's trust fund decreased considerably.

She is very worried about the rising electricity bills.


We have reached the end of a tumultuous year. The value of our pensions and the girls' Child Trust Funds have fallen through the floor.

Our food and fuel bills have skyrocketed. Only our mortgage payments haven't changed, because we fixed the rate earlier this year.

So we still have a roof over our head, food to eat and Clive's job is secure.

But I have two big frustrations hanging over from this year.

It is very unlikely that we will get a holiday next year, there is just not enough spare cash.

Firstly, when will the cost of electricity go down? No supplier seems prepared to make the first move, and once one does the rest will follow. I feel that they are cashing in at the expense of their customers.

Secondly, when will those of us who have been prudent be helped? It seems as though all the government assistance is aimed at those who have borrowed too much and got into debt.

What about those of us who have been careful, are not in debt (apart from a mortgage) and have some savings? All the help is aimed at borrowers, not savers.

I worry more for pensioners that are, or were, using the interest on their savings to top up their pensions. With inflation as it is and rates as low as they are, they must really be hit hard.

Our hopes for next year are that food and electricity prices fall. We would like to move to a bigger house, but that's unlikely in the present climate.

It is very unlikely that we will go on holiday next year as there is just not enough spare cash. Staying in the UK is so expensive, it would probably be cheaper to go abroad, if we didn't have to pay for passports.

Clive has a big birthday to look forward to next year. We are hoping to have a party at the local football club, but again, the cost of that might prevent it happening.

It is not easy to be upbeat about next year at the moment, but who knows what will happen. Maybe a lottery win...


This month has been quiet for us really.

Food prices appear to be stable or starting to fall, with the exception of milk which has gone up again, and fresh meat which we still do not buy unless it is reduced.

Fuel prices have dropped, although we are not sure why unleaded is falling quicker than diesel.

The little we have in savings will attract an even lower rate of interest than it does at present. Maybe there is a case for keeping it under the mattress!

I have changed my car to try to save some money. The new one is cheaper for road tax and insurance, and the mpg is supposed to be higher.

Lets just hope that we do not have a bad winter, now that we no longer have the 4x4.

We are still waiting for electricity prices to fall. Funny how when the oil prices were rising the electricity went up immediately, as we were told they are directly linked.

Now that oil is falling, they are no longer linked that closely.

This month's personal inflation: 6.8%

The large rate decrease announced by the Bank of England last week will not affect our fixed rate mortgage.

But I am sure that the little we have in savings will attract an even lower rate of interest than it does at present!

Maybe there is a case for keeping it under the mattress!

We continue to look for bargains for Christmas presents. This year for ourselves we are buying some rolls of insulation...


We have started Christmas shopping, and with more birthdays before Christmas too, we want to spread the cost over as long as we can.

Things are ticking along. Our bills seem to have stabilised this month, although corned beef has doubled in price and so went off our shopping list.

Maybe it's just that you get used to paying out a certain amount each week for food, so it does not feel quite so painful as it did when the prices were rising almost daily.

Diesel has dropped in price a little, but considering oil prices have gone from about $140 a barrel to $90, then we thought that we may have seen a bigger fall by now.

My feeling is that people are being taken for a ride a bit, we are used to paying the high prices so the retailers will keep them high until enough people realise, and it is more widely reported. As usual, profits come before customers.

Karen's personal inflation: 6.6%

We have started Christmas shopping, and with more birthdays before Christmas too, we want to spread the cost over as long as we can.

There will certainly not be as many presents under the tree as in previous years, but it will still be as enjoyable as ever.

The 'global' situation has not immediately affected us, but the values of our pension funds have fallen. Clive had a statement this week and the fall was about 20% in 12 months.

The Child Trust Funds value has also gone down. We don't plan on retiring soon, and the girls are still young so they will hopefully recover some of the ground lost over the last few weeks. The whole thing does worry us a little, and we will continue to watch with interest at developments, especially bank ownership.

I am not sure that using as much of the taxpayers' money to prop up the financial sector is necessarily the right thing. It is our view that the country would benefit more from having the energy companies re-nationalised, so that the profits stay within the UK and the government can ensure that what they want to happen (fairer tariffs, etc) does happen.


The Norris family on the rise in food bills

This month feels like it has been a long and expensive one. We have had the tail end of the holiday to pay for, and Elspeth's school uniform as she started school.

We had a 'large' shop to do when we got home as we had run the freezer right down so that needed filling up.

We have noticed that bread has gone up a lot since we started monitoring prices, and we have stopped thinking about roast chicken for Sunday lunch as they are now 2 for 7, instead of the 2 for 5 that they were a month or so ago.

Fresh fruit and vegetables have gone up by about 10%, and even with cutbacks our weekly shop is now about 70 rather than 60.

It used to be that when we bought reduced items they were luxury things that we would not normally buy. But now we have to look for the reduced items on our everyday foods.

Our electricity supplier has increased their price by 19%, so I think that we really do need to look at switching, but I am slightly worried about the horror stories that you hear about then getting double billing or meter readings being ignored and the like.

This month's personal inflation: 7.6%

At least our current supplier can be contacted by telephone and does update our meter readings when we ask them to.

I have been trying to make sure that I use the washing machine when the weather is dry so that I can get things to dry outside, rather than using the tumble drier. We do not have the space to have airers full of wet clothes in the house.

Diesel prices had dropped a bit, but we noticed that 2p per litre had crept back on this week.


Whole milk 4l 1.44
Semi-skimmed milk 6l 2.12
Brown Bread 0.59
Cheese - grated (500g) 2.09
Cheese - block (500g) 2.24
Cereals 2.34
Nappies (5)

Things have gone quite well so far. We have been on holiday and have used the little car to get the 60 mpg as opposed to the family car. Its a squeeze but we have all fit in, along with the paraphernalia needed for two small children! I have had to use the car more than I would usually as we had my older daughter staying for 3 weeks so were out and about a bit more. We have already decided that we will be staying closer to home for next years holiday, if we have one at all.

We were considering switching to British Gas for our electric as their online deal was cheaper but have held off until all the big providers have completed their price rises and see who is cheapest then. We have a full oil tank so that should keep us going for quite a few months.

Food shopping is still being done carefully. Clive has managed some good bargains recently so the freezer is fairly full, but will have to do a large shop on return from holiday.

I think we are probably managing better than many as we had just arranged a new fixed mortgage before the credit crunch really hit, but it is still early days.


The biggest impact is fuel and food prices. We run two diesel cars. Clive drives 64 miles a day to work in Aberdeen; we mostly use his car as it averages 60 mpg. It used to cost about 40 to fill up, now it is over 50.

Food shopping has always been done carefully. We rarely pay full price for fresh meat, as Clive tends to pick up reduced meat and bread on his way home from work. We always shop for bargains, especially nappies, and always buy fresh fruit and vegetables, often from the local farm shop.

Domestic oil prices have nearly doubled. Last year we paid 33p/l, this year was 63p/l. We used 1000l this year, and try to heat the house mainly using the wood-burning stove in the lounge which is very effective, and hope for a mild winter again.

For our holiday, we have booked a self-catering cottage in Rutland, which we will use as a base to visit family and friends in England and anticipate driving about 2000 miles, which will cost much more in fuel than budgeted for when we booked the holiday. If it had not already been booked, then we would not be having a holiday this year.

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