Household bills have risen by £326 in the past year

Household bills have surged by £326 on average in the past 12 months according to research by Compare the Market. The research analyses the cost of energy, water, home insurance, motor insurance, and council tax. It reveals that the combined cost of these household bills has increased by up to 6% in the past year.

The increase in average car and home insurance premiums have significantly impacted the cost of household bills. The cost of car insurance is currently £951 – a £322, or 51% uplift versus 12 months ago. The average cost of home insurance is currently £197 – a £46 or 30% rise year-on-year. The increase in insurance premiums may in part be due to a rise in the cost of claims for insurers. Household budgets have faced further pressure from an increase in the cost of water bills and council tax year on year.

Households now typically need to pay a hefty £5,589 each year for their regular bills – an increase from £5,263 last year. A slight fall in energy bills has helped to offset the increased cost of insurance. Ofgem’s latest price cap should cost a typical household £1,928 per year from 01 January 2024. This is £172 less than households were paying last year, based on the £2,500 Energy Price Guarantee with the £400 Energy Bill Support Scheme discount in place 12 months ago.

On average, households could face paying 16% of their average weekly earnings on the increased household bills. Data from Compare the Market’s latest Money Action Index reveals many households with children at home have needed to borrow money to cover regular outgoings. Of the households that use credit cards, 76% struggled to repay their monthly credit card in the past six months.

Hélène Barnes, Cost of Living Expert at Compare the Market, said “Many households will likely be concerned to see increases to their bills over the past year. During this difficult time, it’s important people take as much action as they can by looking for available savings on offer before they purchase a product. For example, you could save a significant amount of money by shopping around for cheaper deals on certain bills, such as car and home insurance, broadband, and credit cards. Comparing prices online is one of the best ways to check you’re getting the right price for you.”

Household Bill	Cost in 2022	Cost in 2023	Change (£)
Energy Bill	£2,100*	£1,928	-£172
Home Insurance	£151	£197	£46
Motor Insurance	£629	£951	£322
Water Bill	£417	£448	£31
Council Tax (Band D)	£1,966	£2,065	£99
Total Cost	£5,263	£5,589	£326

*£2,500 Energy Price Guarantee with the £400 Energy Bill Support Scheme discount in place