Annual household bills have risen by over £550 in the past three years according to new findings from comparethemarket.com– increasing three and a half times faster than inflation over the same period.
The new research, which analyses the average cost of energy, home and motor insurance since 2015 has shown a relentless rise in bills for households across the country. On average, people are paying £2,590 for these three products over the year – up from £2,032 in 2015. The statistics further highlight the financial pressure that households are under as the cost of living continues to rise.
The largest contributor to this rise in costs was, by some distance, energy bills which have increased by £417 on average since 2015 to their current level of £1,706 over the past year. The Big Six which accounts for around 70% of the energy market, has been regularly hiking prices over the past two years – much to the dismay of its customers, many of whom have responded by switching to smaller, challenger providers.
Motor insurance has also significantly increased costs for households, following increases to Insurance Premium Tax and changes to the Ogden Discount Rate. The average motor insurance policy in 2018 cost £724, compared to £611 in 2015 – an 18.5% increase.
On a regional basis, Londoners are paying significantly more for their annual household bills:
- Londoners pay an average of £2,981 – nearly £400 above the national average.
- The North West is the second most expensive region with average household bills of £2,835 in 2018.
- The cheapest region to live in is the North East where households pay an average of £2,368 every year on bills.
Simon McCulloch, Director at comparethemarket.com, said “The cost of living crisis has been well publicised over the past few years and these statistics further add to the weight of evidence that households are under unprecedented pressure in managing their finances. Hikes to bills have come from all directions in recent years with multiple increases in Insurance Premium Tax driving up insurance premiums (including car and home insurance), and the Big Six’s relentless energy price hikes forcing loyal customers to pay ever more for a basic living requirement.
“The research highlights just how important it is for people to be aware that, when it comes to your bills, loyalty does not pay. Customers who don’t shop around are paying the price associated with inertia. However, taking action and switching to cheaper deals could result in hundreds of pounds of savings every year.”