MSE's new Bills Tracker reveals the REAL cost of inflation on household bills

Our new tracker uses data supplied by the Office for National Statistics (ONS) to create a picture of the average price changes for bills across the UK.

Inflation is usually measured by looking at the prices of hundreds of different items, but crucially our tracker cuts most of these out and focuses only on core expenses such as housing costs, energy, fuel and insurance – expenses which most households have and which typically make up the lion's share of their outgoings.

For instance, in the 12 months to July 2017, average energy costs increased by 5.1%. The biggest increase was seen in insurance, with an overall rise of 7.6% – motor vehicle insurance and travel insurance saw the biggest changes of 12.8% and 10.1% respectively. The image below shows some of the key figures:

We'll be publishing updated figures each month so you can get a better picture of how your bills are increasing (or decreasing). Here's how it works and how the info can help you plan your finances.

How does MSE's Bills Tracker work?

Inflation is the rate at which the cost of goods and services bought by households rises or falls. The ONS publishes different measures of inflation, and we've requested specific data to come up with a realistic figure for the average change in a typical household's core outgoings.

Our figure uses elements of CPIH (which stands for – deep breath – the Consumer Prices Index including owner occupiers' Housing costs) – the most comprehensive measure of inflation. CPIH looks at the prices of a 'basket' of 700 goods and services listed in the Consumer Prices Index (CPI), such as clothes, food and furniture – and then adds in costs associated with owning or renting a home.

Crucially, MSE's Bills Tracker cuts down the CPIH basket of goods and services to about 40 costs which many typical households are likely to face every month (see the list below).

We've focused on bills rather than expenses such as food, and stripped out items included in the CPIH that you're unlikely to buy often, if at all, such as rugs, door handles, a ten-pin bowling session and knitting wool. In other words, this is designed to be a real bills index reflecting typical household costs.

What does MSE's Bills Tracker show?

This is the first time we've published the Bills Tracker, but for the launch we've got data going back to February 2016, to see how our figures compare with other measures of inflation.

In the 12 months to July 2017, MSE's Bills Tracker shows an overall increase of 2.1%. This compares to a higher figure of 2.6% for CPIH, meaning core household bills and expenses are growing at a slower rate than other costs such as food and clothing.

Looking back over the last 18 months though, that hasn't always been the case – in fact, between April 2016 and April 2017 the MSE's Bills Tracker was consistently higher than CPIH, meaning core bills were increasing faster than other expenses. The graph below shows how the trend has changed.

Bear in mind that even where the rate of inflation has fallen, that doesn't mean bills have fallen, just that they're increasing more slowly – so you may still be feeling the pinch.

What costs are covered by MSE's Bills Tracker?

For our measure of inflation, we wanted to just look at core bills and expenses faced by many typical households. Here's a list of what's included in MSE's Bills Tracker, and how these costs have changed according to the most recent set of figures:

• Rent and 'owner occupier housing costs'. These are measures of rental costs and the costs associated with owning a home such as a mortgage, maintenance and buildings insurance. The ONS measures these using something called 'rental equivalence', which estimates the amount homeowners would pay to rent their own home. For the 12 months to July 2017,these increased by 1% and 2%.

• Water costs. This comprises water supply and sewerage collection charges. For the 12 months to July 2017, these increased by 1.8%.

• Energy costs. This includes electricity and gas tariffs and other fuels like natural gas, kerosene and coal. For the 12 months to July 2017, these increased by 5.1%.

• Council tax. This is the average council tax bill in Great Britain and the average rates bill in Northern Ireland. For the 12 months to July 2017, these increased by 3.8%.

• Fuel. Including diesel and petrol. For the 12 months to July 2017, diesel increased by 2.4% and petrol by 1.9%.

• Phone and internet. This includes landline, mobile phone (handset and charges) and internet costs. For the 12 months to July 2017, these increased by 0.8%.

• TV licence and subscriptions. This includes TV licence costs and digital TV subscriptions. For the 12 months to July 2017, these increased by 1%.

• Insurance. Including contents, health, travel and vehicle insurance. For the 12 months to July 2017, contents insurance increased by 3.3%, motor insurance by 12.8%, travel insurance by 10.1% and other insurance, eg, health insurance, by 4.5%. The overall increase for insurance was 7.6%.

• Other financial services. This includes costs such as mortgage arrangement fees, bank charges such as overdraft fees, credit card fees and stockbrokers' fees. For the 12 months to July 2017, these decreased by 1%.

How can I use this info to save money?

The idea behind MSE's Bills Tracker is to give a more accurate picture of how most households' bills and expenses are changing. And while we've only just launched it, our hope is that it will help MoneySavers in two ways.

• More accurate info to help you budget better. A detailed budget can help you plan ahead. Providing more realistic figures for how household bills and expenses are changing should help – see our Free Budget Planner Tool.

• Showing where you can save. Our Bills Tracker also highlights price rises and falls in specific areas, which should give you a better idea of benchmark-prices, what may cost you more and what you can try to save on. MSE has a full range of guides showing how to save on the bills we look at, for example:

  • Save money on housing. See our 50+ Tips for Renters, or if you're a homeowner make sure you're getting the best mortgage deal.

  • Cut your water bills. You may be able to save with a water meter, or get free water-saving gadgets. See Cut your water bills.

  • Switch your energy supplier. Sign up to our free Cheap Energy Club and we'll take the hard work out of switching. Just tell us what your current energy tariff is and we'll tell you if you're overpaying.

  • Check you're paying the right council tax.Thousands have overpaid as they're in the wrong band. Take a look at our Council Tax Bands guide to see if you can save.

  • Drive down petrol and diesel costs. Cut the cost at forecourts by reading our Cheap Petrol & Diesel guide.

  • Spend less for surfing the net. There are plenty of ways to save on internet and phone usage – see Cheap Broadband and Cheap Mobile tips.

  • Do you need a TV licence? If you only watch catch-up, you may not need to pay. See our TV licence guide.

  • Get protected for less. See our Insurance section for tips on covering your home, car, holidays and more.