Household bills now rising faster than overall inflation

  • Bills inflation higher than headline rate for first time in 18 months
  • Energy costs rise 9.2% in biggest 12-month growth since August 2012
  • Diesel is up 12.9% and petrol 11.5%

Household bills are rising faster than inflation for the first time since April 2017, according to the latest MSE Bills Tracker data from the UK’s biggest consumer website, MoneySavingExpert.com (MSE).

Average costs for core expenses are up 2.5% in the 12 months to October 2018 – 0.3 percentage points higher than September’s figure – while the headline CPIH(1) rate of inflation has stayed steady at 2.2%. 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%. 

The MSE Bills Tracker uses elements of the official CPIH data(2), supplied by the Office for National Statistics (ONS), to build a picture of the average price changes for household bills across the UK. CPIH is usually measured by looking at the prices of hundreds of different items, but crucially the MSE Bills Tracker cuts most of these out (such as rugs and door handles) to only focus on core expenses which most households have and which typically make up the lion’s share of outgoings.

Guy Anker, deputy editor at MoneySavingExpert.com 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."

Here are some of the main figures (a more detailed breakdown (3) is in the notes to editors)

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Notes to editors

  1. CPIH is the most comprehensive measure of inflation. It 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 a home, and council tax.
  2. The ONS publishes different measures of inflation, and MSE has 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 (the Consumer Prices Index including owner occupiers' housing costs). We hope that the Bills Tracker provides more realistic figures for how household expenses are changing, so consumers can budget and plan ahead, as well as highlight the rises and falls on specific bills to better decide where they can save.
  3. How the cost of different bills changed in October:
  • 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%.