• Average monthly household bill payments currently stand at £845, up 5.7% on the year before
  • Increases in housing costs (mortgages / rent payments) were the primary driver of the household bills hike
  • Drivers hit particularly hard with higher insurance following recent changes to Insurance Premium Tax and the way in which compensation is calculated

07 August 2017 – Household bills have risen at over double the rate of inflation over the past year, according to new research by Its new Billflation Index analyses the monthly cost of housing, energy, motor insurance, home insurance, petrol and utilities. The key finding from this first index reveals that the average monthly cost of household bills rose by 5.7% to £845 in April 2017 compared to April 2016.

The 5.7% year on year increase in household bills compares to a 2.6% annualised rise in inflation, as recorded in April 2017. The primary driver of this rise in household bills is the increased costs of mortgage and rental payments. The average monthly housing payment, which includes mortgage repayments, private and social housing rent, rose by £23 over the past year. The rise in housing costs across all tenures can broadly be attributed to the continued house price growth forcing people to take larger mortgages meaning the monthly repayments are larger. However, with interest rates at record lows, the cost of servicing a mortgage is also extremely low presenting an opportunity for mortgage holders on a standard variable rate to reduce their payments.

The increased cost of energy also significantly drove up bills over the past year, with the average monthly energy bill having risen by almost 6% to £94.

The Insurance Premium Tax (IPT) hikes also drove up the cost of motor insurance by 8.2%, to an average of £61 per month. There are a number of reasons for this significant increase from IPT to increasing whiplash claims and changes to the way in which personal injury compensation payments are calculated. Drivers have also faced further cost pressures, with the price of petrol also rising dramatically by 10% to £100 per month.

Simon McCulloch

Simon McCulloch


"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 could save hundreds of pounds.

“With house prices continuing to rise, the amount home buyers are having to repay has increased over the past year. However, 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!”


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