Household bills rise at double the rate of inflation
Housing, insurance and utility bills stood at an average £845 a month in April 2017 compared with April 2016. This represents a 5.7% year-on-year increase compared with the 2.6% annualised rise in inflation, according to Comparethemarket.com’s analysis.
The comparison site said the primary driver of the rise in household bills was due to increased costs of mortgage and rental payments. It found the average monthly housing payment, which includes mortgage repayments, private and social housing rent, rose by £23 over the past year.
It added that the rise in housing costs can also be attributed to the continued house price growth which has forced people to take larger mortgages meaning monthly repayments are greater.
Comparethemarket.com also found the growing cost of motor insurance significantly drove up bills over the past year, with the average monthly premium having risen by 8% to £61. The government hikes in Insurance Premium Tax, increasing whiplash claims and changes to the way personal injury compensation payments are calculated added to the costs.
Drivers also faced further cost pressures as petrol pump prices have risen by 10% to £100 per month, it said.
Simon McCulloch, director at comparethemarket.com, said: “These figures highlight the real pressure that households are under when it comes to paying their regular bills. Increases in the cost of housing, energy and driving, all staple costs for most households, have certainly been felt in people’s pockets, as costs continue to outstrip wage growth.
“However, there is hope for people facing these seemingly endless cost rises. Over the past few years, there has been a big shift in consumers becoming savvier with their grocery shopping and hunting out the best deals and people should really apply the same approach to their household bills. By taking the time to search for better deals on energy, insurance and other costs, it could save hundreds of pounds.”
McCulloch added that for those on a standard variable rate, mortgage payments could be significantly reduced by remortgaging to one of the historically low fixed interest rates before the Bank of England raises rates.
“All of these providers to a greater or lesser extent rely on customer inertia to keep prices and rates high. Only action can keep prices in check,” he said.