Households to start the new year ‘£360 worse off’
Household bills rocketed by almost £200 in 2016 following a £180 drop the previous year, according to research by comparethemarket.com.
Its analysis found that average household bills rose by 9.7% in the past year from £2,032 in 2015 to £2,223 in 2016 with the average energy bill rising by almost £100 to £1,383, despite a fall in wholesale costs.
Car insurance premiums also rose on average by £96 in the past year as the Insurance Premium Tax (IPT) hikes took hold.
The cost of home insurance also saw modest increases over the past year, rising from £135 on average in 2015 to £140 in 2016.
And with consumers taking on around £160 in debt over Christmas, it means many households will be starting the year £360 worse off than they were before.
Consumers’ top concerns
The research comes as campaign group Which? revealed energy prices now top the consumer worry list, along with fuel prices and public spending cuts.
It found that nearly two thirds (64%) of people said they were worried about energy prices, a rise of 8% since September, and distrust within the energy sector has also increased by 6%, meaning a third of consumers (35%) now distrust the sector.
Simon McCulloch, director at comparethemarket.com, said: “This rise in the cost of bills is pretty devastating news for consumers who will inevitably be feeling significantly harder up as we go into 2017.
“Despite the fall in wholesale energy prices, the falling pound, caused by the Brexit vote, has made importing energy more expensive. Inevitably, the higher costs are being passed straight on to the consumer, adding almost £100 to people’s annual energy bill. On top of this, the Government’s increases in insurance premium taxes has meant average premiums have hit record highs and are showing no sign of slowing down.”
He said there is still hope for bill-weary consumers as the average person can save around £300 on their energy bills by switching. They could also cut around £250 on average by changing motor insurance provider.
“After such a devastating increase in costs, it is essential that consumers take back control of their bills,” McCulloch said.