Average family energy bills have risen by 63% since 2021

31st January 2024

Research from Nationwide shows how costs have soared for the typical British family since 2021 – from mortgage or rent payments to food, energy and fuel – with more than one in five households having less than £100 spare each month.

Continued high costs have led to more than two-thirds (69%) of family households feeling more worried about their finances in 2024 compared to a year ago, the poll shows. The average amount of discretionary money available to families each month has dropped from £328 in 2021 to £295 in 2022 and £237 at the end of 2023.

The research found that more than one in five (22%) families had no more than £100 spare a month by the end of last year – almost double the percentage in 2021 (13%). The percentage of families with no money left at all by the end of each month also increased nearly twofold, from 11 per cent in 2022 to 21 per cent in 2023.

However, despite the cost-of-living support that is available, Nationwide’s research found that almost half (49%) of those who haven’t yet spoken to their bank or building society say that either they don’t know who to speak to about their financial situation, or don’t think their financial institution could help them.

Mandy Beech, Director of Retail Services at Nationwide Building Society, said “Despite the rate of inflation coming down, many households continue to feel the pressure as costs remain historically high. Families have been hit particularly hard, with little spare money at the end of the month. What is most concerning is where people have said that they don’t know who to speak to about their financial situation, or don’t think their bank or building society could help them.

“We are here for our customers. Our cost-of-living helpline was set up to support our customers through this crisis and help them get back on track. Our branches also provide face-to-face, cost-of-living support to those who need it. We would urge anyone with concerns to get in touch with their financial services provider for support sooner rather than later because it could make a positive difference.”

Overview of findings

Mortgages: Successive interest rate rises had seen mortgage rates increase since last spring, leading to the average monthly payment rising by almost a quarter (22%).  The number of families paying over £750 each month on their mortgage rose to 51 per cent of respondents in 2023, compared to around 37 per cent two years before. However, recent rate reductions should help to ease financial pressure here in the coming months. Nationwide is committed to providing support to borrowers who are in financial difficulty and, as signatories of the Government’s Mortgage Charter, provides additional options to those who may be struggling. Furthermore, Nationwide wrote to 1.3 million mortgage customers to inform them of the support available.

Rent: The impact on rent payments has been even more pronounced, with over 56 per cent of households now paying over £750 per month, compared to just 33 per cent in 2021.

Food Bills: With recent supply chain issues, and food producers incurring higher costs, families are seeing the costs of their shopping baskets increase by 32 per cent since 2021.

Energy Bills: It is here where most families have seen the biggest impact on their household finances, with the average monthly bill now over £200 per month, an increase of 63 per cent in just two years. With the Energy Price Cap having recently increased again, pressure is set to increase further. Nationwide’s relationship with energy switching service, Switchd, provides members with a free 6-month subscription to help find a cheaper energy deal and help reduce some of the pressure on household finances.

Fuel Costs: As the cost of fuel crept up again in recent months1, before falling away slightly in November and December, more than one in four (26%) say they have to stop filling up their car with fuel at an exact amount due to cost pressures, with a further 24 per cent saying they drive around to find the cheapest fuel, rather than visiting their nearest petrol station.

The poll also uncovered some of the steps families are having to take to afford their energy bills this winter, at a time when most areas of the UK are experiencing more extreme weather. Almost 16 per cent say they will have to work more hours to earn more money, 16 per cent say they will need to use their credit card and 15 per cent will need to borrow money from family and friends to cover their bills. Almost half (46%) are reducing other outgoings to help cover energy bills this winter.

Despite more than four in ten (43%) describing their financial situation as worse in January 2024 than six months ago, there are signs of an improving outlook ahead. Over two thirds (67%) of respondents said they had adapted either fairly well, or very well, to the cost-of-living crisis and over 50 per cent say that, while things are tight, they are managing to meet their financial obligations. One in five (20%) feel pressure is beginning to ease and are hopeful that things will get better in the coming months.