Cost of key household bills rocketed in 2017

3 January 2018

Rising energy costs caused average annual household bills to rise by £286 between 2016 and 2017, according to new research.

Price comparison website Compare the Market looked at the average cost of energy bills, motor and home insurance over the last two years.

It found that the average household paid £2,502 for these services in 2017, £286 more than in 2016. This represents a 13% increase in these key household bills.

This rise was largely down to increased energy costs, with the average household spending £1,625 on gas and electricity in 2017 - £241 more than the previous year.

The average car insurance policy cost meanwhile, increased by £43 compared to 2016, rising to £735. This was attributed to the increase in the insurance premium tax (IPT), applied from 1 June 2017 onwards, and changes to the Ogden rate which came into force on 20 March 2017.

However, the changes to the Ogden rate {may soon be reversed} following complaints from the insurance industry.

See the table below for the change in key household bills from 2016 to 2017. 

Energy bills£1,625£1,384
Car insurance£735£692
Home insurance£141£141

Source: Compare the Market, 2 January 2018.

‘It’s been a torrid three years for household finances’

Simon McCulloch, director of Compare the Market, says: “It’s been a torrid three years for household finances. The combination of soaring bills and squeezed wages is causing a lot of pain for millions. The ongoing trend of ‘billflation’ is most apparent within the car and energy markets; in the latter case consumers can expect to pay around £200 more than they did in 2016.

“UK motorists are paying a heavy price for the changes to IPT in 2016 and 2017 and the Ogden rate, brought about in March this year, which have significantly increased the costs of insuring a vehicle.

“Despite recent announcements from big-six energy firms who plan to scrap standard variable tariffs (SVTs), millions are still languishing on expensive default tariffs, which may account for the fact that energy costs are at a record high.”

Use Moneywise’s energy comparison tool to check if you can switch and save. 

Read more about insurance on Moneywise

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