Almost everyone has felt the effects of sudden cost of living increases, and for many it has had real consequences on where and how they live and work.
With soaring energy bills and increases in both food and petrol, consumer inflation in Europe hit eight percent in May and could reach nine percent by the end of the summer. Those who moved abroad to work or study have felt the effects particularly keenly.
Together with the international health insurance provider, AXA – Global Healthcare, we investigate why costs have soared so quickly, and exactly how this impacts those who have made another country their home.
What is driving the increase in living costs?
While there’s no singular reason that living costs are increasing across the globe, there are several factors that we can point to as contributing to the problem.
First and foremost, the coronavirus pandemic had a devastating effect on manufacturing industries and supply chains around the world. Worker illness, government shutdowns and disruptions to the supply of essential resources dealt a significant blow to global GDP in 2020, resulting in a fall of more than three percent.
Restarting manufacturing and global logistics after months of effective shutdown subsequently led to a substantial rise in the costs of goods, as supply struggled to keep up with surging demand. Even with massive investment in logistics infrastructure, to date there are still lengthy delays supplying goods such as machine parts and electronics, leading to surging business costs.
Climate change has also played a role in the crisis. The increasing unpredictability of weather patterns over the past two years has meant that many regions around the world were impacted by severe weather events, including several in Europe. An increased incidence of heat waves and cold snaps have also placed a strain on gas reserves, leading to escalating power bills.
Of course, the war in Ukraine is having a serious impact on the cost of living, most noticeably in Europe. The World Bank has suggested it could be responsible for the biggest price shock in 50 years. As a major agricultural nation, wheat prices have begun to sharply increase following the invasion, as has the price of natural gas – Ukraine holds Europe’s second-largest reserve of the resource.
Another consequence of the Ukraine war is spiraling fuel prices. As Russia is one of the world’s top three oil exporters, its current frosty relationship with the West means that the cost of oil per barrel will remain elevated. Coupled with logistical delays in delivering gas and fuel, as an ongoing consequence of the pandemic, consumers and businesses are experiencing substantially increased transport costs.
How do rising costs impact internationals?
Its research, conducted prior to the current crisis, indicated that 28 percent of non-native (international) participants rated their stress level between eight and 10 (out of 10), while 35 percent of non-natives said that financial stability was an issue causing stress. Thirty-nine percent of non-native participants believed that they faced an uncertain future when it comes to work and finances – a massive stressor, regardless of where you may be.
The causes of this are also clearly identifiable. Primarily, many internationals simply do not have the assets to sustain repeated price shocks in terms of food or energy costs. A survey conducted by market research firm, Finaccord, found that approximately three-quarters of internationals worldwide are individual workers – ie. depending on a single income.
A further third are also students, meaning that they are paying tuition costs while trying to support themselves, whether with a local job or payments from home. Quite simply, many internationals cannot afford to pay much more for necessities, particularly at a time when wages have stagnated.
Many internationals also lack the kind of support networks that would let them otherwise overcome economic turmoil. Earlier research by AXA revealed that 87 percent of participating internationals felt isolated and cut off from family and friends, who would otherwise be able to assist and share costs.
As a consequence, further research conducted in 2019 by AXA – Global Healthcare revealed that one in five participating internationals would return home should prices continue to rise – even though over 50 percent reported that they enjoyed a better salary and quality of life than they did at home.
The research also discovered that housing and tuition costs comprised the hardest financial pressures for internationals – with 51 percent identifying rent and housing costs, and 40 percent identifying education as more costly than expected.
It could be stated, therefore, that prior to the global spike in the cost of living, internationals already found themselves in a tight spot, with the threat of having to return home looming over them. Now, with skyrocketing prices, excessive and prolonged stress is an even greater contributor to a range of illnesses.
Securing an international future
Moving abroad to start a new life is a costly endeavour and one that many work for years to achieve. It’s worth it, however: the experience of working or studying abroad is suggested to have a number of economic and lifestyle benefits.
That said, navigating the financial stresses of rising costs can be challenging.
Many internationals opt to offset the challenges of rising costs with comprehensive health insurance coverage. AXA – Global Healthcare’s research shows that a quarter of internationals worry about the cost of healthcare in their new home, and would even travel abroad to seek treatment.
Depending on where you are, unforeseen medical costs can run into the tens of thousands, meaning the difference between getting by, and having to return to your home country.
If you’re seeking a health insurance provider that offers comprehensive coverage and a range of useful benefits, you may want to consider AXA – Global Healthcare. Operating globally, the company has over 55 years of experience in covering those living and working abroad¹.
AXA – Global Healthcare policyholders get 24-7 care from personal advisors, connecting them with excellent private healthcare from a worldwide network of doctors, surgeons and specialists.
Outside of emergency care, AXA – Global Healthcare provides a number of additional benefits. Policyholders are able to access a number of annual check ups. Special care is available to those diagnosed with cancer, and mental health issues aren’t ignored – the AXA – Global Healthcare Mind Health Service¹ means that you have professionals for support wherever you may be.
As an international, dealing with the rising costs of living can be difficult. However, you can ensure that should something happen to you, you can avoid unexpected financial burdens.
Furthermore, with AXA – Global Healthcare’s range of additional services, you can make sure health problems are identified before they become a problem, allowing you to focus on living, working and enjoying life abroad.
¹AXA has been providing International Private Medical Insurance for over 55 years
²The Mind Health Service is provided by Teladoc Health,
AXA Global Healthcare (EU) Limited. Registered in Ireland number 630468. Registered Office: Wolfe Tone House, Wolfe Tone Street, Dublin 1. AXA Global Healthcare (EU) Limited is regulated by the Central Bank of Ireland.
AXA Global Healthcare (UK) Limited. Registered in England (No. 03039521). Registered Office: 20 Gracechurch Street, London, EC3V 0BG, United Kingdom. AXA Global Healthcare (UK) Limited is authorised and regulated in the UK by the Financial Conduct Authority.