Household bills now rising faster than inflation, MSE Bills Tracker shows

Average costs are up 2.5% over the 12 months to October 2018 – a 0.3 percentage point rise compared to September's 12-month figure.

However, the headline figure for overall inflation (CPIH, which stands for – deep breath – the Consumer Prices Index including owner occupiers' Housing costs) stayed steady at 2.2% between September and October. So bills and household expenses are now rising faster than inflation for the first time in 18 months.

The biggest surge was in energy costs, which rose 9.2% in the 12 months to October 2018, compared to 8.1% in August. Diesel costs are also up 12.9% and petrol costs 11.5%.

Here are some of the main figures – you can see a more detailed breakdown below:

How does MSE's Bills Tracker work?

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

Inflation is the rate at which the cost of goods and services bought by households rises or falls. It's 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 which most households have and which typically make up the lion's share of outgoings.

Our figure uses elements of CPIH, which stands for 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 inflation measure, such as clothes, food and furniture, and then adds costs associated with owning or renting a home.

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 full 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 October's MSE Bills Tracker show?

The MSE Bills Tracker shows that overall household bills and expenses increased by 2.5% over the 12 months to October, up from 2.2% in the same period to September.

The graph below shows how the Bills Tracker has compared with CPIH since May 2017:

How the cost of different bills changed in October

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 October 2018, these increased by 0.6% and 1.1%.

• Water costs. These include water supply and sewerage collection charges. For the 12 months to October 2018, these increased by 2.7%.

• Energy costs. These include electricity and gas, and other fuels such as natural gas, kerosene and coal. For the 12 months to October 2018, these increased by 9.2%.

• 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 October 2018, this increased by 4.9%.

• Fuel. Including diesel and petrol. For the 12 months to October 2018, diesel increased by 12.9% and petrol increased by 11.5%.

• Phone and internet costs. These include landline, mobile phone (handset and charges) and internet. For the 12 months to October 2018, these increased by 1.9%.

• TV licence and subscriptions. These include TV licence costs and digital TV subscriptions. For the 12 months to October 2018, these increased by 2.9%.

• Insurance. Including contents, health, travel and car insurance. For the 12 months to October 2018, contents insurance increased by 4.1% and travel insurance by 6.3%, while car insurance decreased by 9.3%. Other insurance, eg, health insurance, increased by 3.7%. The overall decrease for insurance was 1.5%.

• Other financial services costs. These include costs such as mortgage arrangement fees, bank charges such as overdraft fees, credit card fees and stockbrokers' fees. For the 12 months to October 2018, these decreased by 5.4%.

'The impact is massive – but there's plenty you can do'

MoneySavingExpert.com deputy editor Guy Anker said: "The impact of this type of inflation is massive because it's the expenses almost everyone has and it affects the things you perhaps need the most and/or spend the most money on, such as the heating or getting online.

"Yet don't get too down in the dumps, as there's plenty you can do to ease the pain of rising costs by switching from standard deals to cheaper alternatives. The average home can save £200 a year by switching energy provider, you can tackle sky-high insurance costs with a quick comparison and save £100s, or you can slice broadband and phone costs in half. It can be well worth the time."

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. 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.

• 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, including:

• 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 to surf the net. There are plenty of ways to save – see our Broadband Unbundled tool 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.