In the UK household bills are getting totally out of control. In 2016, prices rose by more than 9.7 percent, and in 2017, they could rise still further. According to data from comparison websites, the average home now spends more than £2,223 on bills, up £200 from their level in 2015, massively above the official rate of inflation.
So what is driving all these costs higher?
Car Insurance Costs
Right now, car insurance costs are totally out of control, thanks to the fact that the Treasury has been continuously doubling the amount of tax that people have to pay as part of their car insurance premium. The so-called Insurance Premium Tax has been increased more than three times by the government since 2014 and will double again from 6 percent to 12 percent in June 2017. According to experts, this will increase the average cost of insurance by £109 a year compared to just two years ago.
The good news is that motorists can hit back against yet another government tax hike. Shop around for good deals through companies like Money Expert and check to see whether there is any way you can save on your massive bills.
It’s also a good idea to pay for your car insurance in one big lump sum. Usually, this is the cheapest way by between 10 and 20 percent of the final bill.
Rising Gas And Electricity Prices
Wholesale energy prices have already started rising this year and large energy providers, like Eon, have already said that they will hike prices. At the same time, prices at the pumps are going up, relative to people’s incomes, meaning getting around by car is about to get a lot more expensive.
The average UK household spends around £1.066 on energy each year. Mark Todd from Energy Helpline says that energy prices are likely to rise by more than five percent in 2017, thanks to shortages in supply. This means that the average family could see an extra £53 added to their bill, well above the rate of inflation (as always).
Again, one possible solution is to try to find a better deal on price comparison websites. A Sun investigation found that most families weren’t on the cheapest tariffs and that they could save up to £389 if they switched energy provider.
Increasing Mortgage Rates
There was some good news for regular families in 2016: mortgage rates have never been so low, meaning that taking out a big loan and getting the first step on the housing ladder has never been easier. With that said, rates aren’t likely to stay low forever., Over in the US, Janet Yellen has already raised the base rate twice, and she’s signalled that she’s willing to raise it further this year. Since western central banks tend to move in tandem with each other, it’s likely that the Bank of England will also tighten credit markets.
Back in August last year, the base rate was set at 0.25 percent, but the Bank of England has repeatedly suggested that rates will rise, especially if inflation is going up.
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