Household bills rose by almost £200 in 2016 according to new findings from comparethemarket.com. An analysis of costs across energy, motor and home insurance found that, after a £180 drop in 2015, bills rose by 9.7% in the past year from £2,032 in 2015 to £2,223 in 2016.
Key finings in the report included:
With consumers taking on around £160 in debt over Christmas, many will be starting the year £360 worse off than they were before
Motor insurance saw the highest price hike, with average premiums reaching £691 in 2016 compared to £595 in 2015 – a rise of £96. The rise can be attributed, in part, to the three hikes in insurance premium tax announced over the past two years.
Despite tumbling wholesale prices in 2016, household energy costs jumped by almost £100 from £1,289 in 2015 to £1,383 in 2016. However, the change in the value of the pound following the referendum will have made the cost of importing wholesale energy more expensive for British energy companies. This increase in costs will ultimately hit customer bills. The cost of home insurance also saw modest increases over the past year, rising from £135 on average in 2015 to £140 in 2016.
The huge rise in bills has undone what was an extremely positive year for consumers in 2015. Average household bills tumbled by £186 in 2015 compared to 2016 but have now risen back above their 2014 peak.
Simon McCulloch, Director comparethemarket.com, said “This rise in the cost of bills is pretty devastating news for consumers who will inevitably be feeling significantly harder up as we go into 2017. Despite the fall in wholesale energy prices, the falling pound, caused by the Brexit vote, has made importing energy more expensive. Inevitably, the higher costs are being passed straight on to the consumer, adding almost £100 to people’s annual energy bill. On top of this, the Government’s increases in insurance premium taxes has meant average premiums have hit record highs and are showing no sign of slowing down.”
“However, there is hope yet for bill-weary consumers, when you consider that the average person can save around £300* on their energy bills by switching and could also cut around £250 on average by changing motor insurance provider. After such a devastating increase in costs, it is essential that consumers take back control of their bills.”