The start of April will bring with it a leap in household bills – but experts have issued the latest advice on how you could offset some, or all, of the financial pain
Millions of families are braced for a more than £10billion surge in bills when “Awful April” hits. Research suggests households will be left shelling out an average £360 extra a year, with a number of essential outlays going up all at the same time. Coming on the top of the government’s cuts to welfare, the hikes risk driving more people into poverty.
But experts say being savvy could offset some or all of the pain. Families will be clobbered with increases in everything from energy and water to council tax from next week. Many will also suffer a jump in their mobile and broadband costs and, if they have a car, road tax too.
Yet it comes as debt experts warned of the pressure many households are already under. Charity StepChange recently revealed that almost three in 10 of those coming to it for help have more going out in bills every month than they have coming in.
Energy bills for millions of households will rise by 6.4% – or £111 a year – from April 1 when regulator Ofgem increases its price cap. Meanwhile, water bills will increase by an average £123 per year – an inflation-shattering 26% – and the largest rise since the industry was privatised in 1989.
Millions of households will see a jump in their annual council tax bills from April 1, with most local authorities in England increasing a typical band D bill by 5% – an increase of £109 to £2,280. Some local councils have permission to impose hikes of up to 10%. Broadband and phone bills are also rising, the cost of a TV licence is going up by £5, and even the cost of first and second class stamps are rising.
Personal finance analyst Alice Haine, at Bestinvest by Evelyn Partners, said: “Households face a barrage of bill hikes in April that will take a swipe at their living standards by eating away at their disposable income. Anyone lucky enough to receive a pay rise in recent months will be dismayed to see most of that swallowed up by sharp hikes in household bills, whether that is council tax, water or energy, among other costs and taxes.
“Going back to budgeting basics will be key for households to ensure they don’t stray into overdrafts or find themselves forced to pay bills on credit cards because they cannot make ends meet.”
Amy Knight, personal finance expert at NerdWallet UK, said: “Higher bills are always stressful, and it can take time for households to adjust their budgets to cope with bigger outgoings. But what’s contributing to the rising sense of panic among consumers is that this year’s annual bill hikes follow the news that many people could lose benefits they currently rely on.
“Our research shows that Brits could see their expenses rise by an average of £32.17 per month – adding up to over £360 a year and a staggering £10.2billion in extra costs for the UK’s 28 million households.”
However, experts said there were still ways households could mitigation next month’s increases, especially if they have stuck with the same household providers for years.
On energy, households on a standard variable tariffs – those covered by the price cap – are being urged to submit a reading on or around Monday, before the new higher rate applies. But experts say those same customers should look at moving to a fixed rate deal instead. According to the website Uswitch, there are fixed deals on the market offering savings of around £244 compared with the April price cap for the average household – the biggest savings since May last year.
Ben Gallizzi, energy expert at Uswitch.com, said: “By opting for a fixed deal, you’re locking in those rates for the duration – which means households could have price certainty and avoid the ups and downs of the price cap. Make sure you’re happy with how long the contract lasts and the exit fees you may have to pay to leave early.”
Making savings on water bills is harder, given households can’t switch provider. But Amy Knight says: “Switching to a water meter can be a great way of lowering your bill, as you’ll be charged based on your actual usage not an estimate. If your fixed-rate charge is based on property size, you might be overpaying. On top of this, installation is free.
“To further reduce costs, watch out for wasted water; this includes fixing dripping taps, repairing toilet leaks, and avoiding leaving the tap running while brushing your teeth.”
Andy White, from the Consumer Council for Water , said: “It’s deeply troubling that more than two in five customers have told us they are already reducing their spending on essentials like food and heating just to try and keep on top of household bills. Rising water and energy costs can leave customers feeling powerless, but water companies have a broad range of schemes like social tariffs which can significantly reduce the bills of those struggling to pay.
“Other steps like checking to see if you might be better off on a water meter or making small changes to your use of hot water can also save hundreds of pounds.”
Research by consumer group Which? found households who are out of contract on their broadband, pay TV and mobile provider could slash their bills by up to £235.
With train fares and rail cards also rising in March, Emily Seymour from Which? advised: “We’d recommend booking tickets in advance and splitting fares where possible. Railcards – available for those under the age of 30, over the age of 60, and for those with disabilities – can also help you save up to a third on off-peak journeys so it’s worth checking if you’re eligible.”
Next month’s raft of rises come as other costs, including food, continue to go out.
