9.7% increase in bills in 2016 leaves consumers out in the cold

Latest research from our insurance and energy teams has revealed that household bills have risen by almost £200 in 2016. We looked into energy, car and home insurance costs and found that, after a £180 drop in 2015, bills rose by 9.7% in the past year from £2,032 in 2015 to £2,223 in 2016.

Tightening purse strings

We’d already discovered that people were taking on an average debt of £160 at Christmas this year, and combined with this latest price hike, many will be starting the year £360 worse off with their money than they were before.

Our latest Premium Drivers report has shown that car insurance buyers have suffered the most, with average premiums reaching £691 in 2016 compared to £595 in 2015 – a rise of £96. The three hikes in insurance premium tax announced over the past two years seem to be the main contributor to higher costs.

Increasing household costs

Even though wholesale energy prices fell in 2016, our household energy costs jumped by almost £100 from £1,289 in 2015 to £1,383 in 2016. Unfortunately the falling value of the pound has meant that the cost of importing wholesale energy more expensive for British energy companies, which could ultimately be passed on to us consumers and affect our pockets. Even home insurance saw increases over the past year, rising from £135 on average in 2015 to £140 in 2016.

The huge rise in bills has undone what was an extremely positive year for consumers in 2015. Average household bills tumbled by £186 in 2015 compared to 2016 but have now risen back above their 2014 peak.

9.7% increase in bills in 2016 leaves consumers out in the cold

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Simon McCulloch

Director

comparethemarket.com

“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. However, there is hope yet for bill-weary consumers, when you consider that the average person could save around £300** on their energy bills by switching and could also cut up to £250  by changing motor insurance provider.^^ After such a devastating increase in costs, it’s essential that consumers take back control of their bills.”