Household bills at lowest level in three years
Average household bills in 2020 – comprising energy, home and motor insurance – came in at £2,527, falling from £2,702 in 2019 and are now at their lowest level since 2017.
The cost of energy has accounted for almost all of the £174 year-on-year saving, as according to comparethemarket, typical bills have fallen £171 from £1,803 to £1,631 last year.
The comparison site said the fall in average energy bills in 2020 was likely due to suppliers passing on some of the savings from the drop in wholesale energy prices, off the back of reduced demand for energy during the two national lockdowns, despite more people staying at home.
Meanwhile, motor and home insurance bills saw smaller changes in 2020, with car cover falling £10 to an average £724. However, this is still the lowest cost since 2016.
Home insurance has actually risen £7 from 2019, standing at £172. This represents the fifth consecutive year of increasing car cover costs since 2015 when it averaged just £131.
Switching to the cheapest deals on the market for all three of these bills could save households a significant £494 per year. This includes a £367 saving on energy bills, a £21 saving on home insurance, and a £105 saving on car insurance.
Ursula Gibbs, director at comparethemarket.com, said: “The fall in annual bills is a rare piece of good news following a bruising twelve months for household finances. However, our household financial confidence tracker shows that nearly a fifth of UK households think they will struggle to meet the demands of their household bills in the coming weeks. Switching to a cheaper deal could be key to helping those who have seen hits to their income or further strain placed on their finances as a result of the pandemic.
“Shopping around for the cheapest deals on household bills is one of the simplest and most effective ways to save money for households with shrinking budgets. In particular, although more people are staying at home, the lockdowns actually resulted in a fall in the average cost of energy so it could be a good time to lock in some of the most affordable fixed rate deals we’ve seen in years.”