Household bills hit record levels in 2016

Household bills rose by almost ten per cent over the course of 2016, according to new analysis from Comparethemarket.com.

Following a £180 drop in 2015, average energy and insurance costs shot up from £2,032 to £2,223, according to the price comparison website.

This marked a 9.7 per cent increase during 2016 over the previous year and surpassed a record high from 2014.

Motor insurance saw the most significant price rise, as average premiums jumped by £96, from £595 in 2015 to £691 in 2016. This was due to a trio of insurance premium tax increases announced in the past two years.

Meanwhile, household energy costs climbed by £94, from £1,289 in 2015 to £1,383 in 2016. The last 12 months have seen a major drop in wholesale prices, but these have been offset by a rise in the cost of importing wholesale energy for British energy firms following disruptions to the value of the pound after the Brexit vote.

Home insurance was also £5 more expensive in 2016, costing £140 on average.

Devastating

Simon McCulloch, Comparethemarket.com’s commercial director, believes these heftier bills will be devastating news for any consumers suffering a financial hangover at the start of 2017.

“Despite the fall in wholesale energy prices, the falling pound, caused by the Brexit vote, has made importing energy more expensive,” he commented.

“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.

“However, there is hope yet for bill-weary consumers, when you consider that the average person can save around £300 on their energy bills by switching and 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.”

By James Francis