The cost of energy, water and broadband bills increased today (1 April), leading to the month being dubbed ‘Awful April’ – tips on how to beat the hikes are here.
Households in the UK’s lowest 10% for income will spend over two-fifths (41%) of their earnings – left over after paying for housing costs – on water, energy, broadband and car insurance bills, Citizens Advice research shows.
For those earning the average salary of £35,830 (according to the Office for National Statistics (ONS)), the outlay drops to 11%, while workers in the top 10% for income spend just 5% on those outgoings.
Further, single-adult households with children will be hit harder than other families and will spend a fifth of their income, after housing costs are paid, on bills.
The charity warned this leaves them “more exposed to price shocks” than any other demographic.
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To combat the potential challenges households face in paying bills, Citizens Advice has recommended bill support schemes to be added to cover those essential bills. The Institute for Public Policy Research (IPPR), which conducted the research, noted households in the lowest 10% of the UK for income could save hundreds of pounds every year if tariffs could cover a quarter of essential bills.
As of today, gas and electricity bills rose to £1,849 per year – a rise of £159 on 2024 – for most families after the energy price cap increase. Meanwhile, broadband will typically rise by around £21.99 for customers on an inflation-linked contract.
The poorest families are also impacted the most by the council tax hikes this month, according to a separate study from Resolution Foundation. Also, millions of homes in places including Bradford, Newham and Somerset are set for a higher council tax charge than the rest of the UK’s 5% annual rise.
After reforms from the regulator Ofcom, suppliers now need to tell customers of any price rises in pounds and pence, and customers with that deal will pay £42 more per year.
Phone holders will feel a £15.90 increase on an inflation-linked offer and £48 for the new pounds and pence deal.
‘Already eating away at their finances’
Clare Moriarty, chief executive of Citizens Advice, said: “After years of cost-of-living pressures, households across the country are about to feel the extra shock of rising essential bills. But for those on the lowest incomes, these unavoidable costs are already eating away at their finances, leaving their budgets stretched beyond breaking point.
“Social tariffs could be an effective safety net and put money back in people’s pockets, but the Government and providers must work together to make sure nobody struggling to make ends meet misses out.”
Moriarty added: “We want to see people eligible for bill support automatically enrolled to receive it. This change can’t come soon enough.”
Professor Ashwin Kumar, director of research and policy at IPPR, said: “Essential bills are leaving the lowest earners with little room to breathe and causing huge anxieties. Well-designed social tariffs and bill support – across water, energy, broadband and insurance markets – could save households hundreds of pounds a year and provide a vital lifeline to some of the most vulnerable people across the country.”
