Warning of ‘big payment shock’ next year as household bills will suddenly increase | Personal Finance | Finance

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Prices for everyday essentials such as food and energy, have consistently gone up over this past year, with energy bills for the average home currently at £2,500 a year. This capped amount is only because of the Government’s Energy Price Guarantee, introduced in October, and the guarantee is increasing in March, when average energy bills will rise to £3,000 a year.

Research from Comparethemarket.com found household bills have gone up by £1,316 in the past 12 months, with a typical household spending £3,280 a year on their energy, care and home insurance, based on figures for November 2022.

Analysts from the comparison site have warned bills could suddenly increase at a particular point in 2023.

Hélène Barnes, cost of living expert at Comparethemarket, explained: “Millions of households will be worried about rising costs, with many struggling to afford their regular bills and energy prices which are at their highest level in years.

“The cost of energy is set to increase further when the Energy Price Guarantee rises in April 2023.

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“Most broadband, phone and TV providers are also set to raise their prices in line with inflation in April, and many households will likely face a big payment shock.

“Before these price rises are introduced, households need to check all their regular bills to see where they could save money.”

The researchers found that with the average annual energy bill at £2,500, Britons are paying £1,233 more compared to average figures for November 2021, and £1,458 compared to November 2020.

Insurance premiums have also increased over the past year as insurers have reacted to the rising cost of claims.


The average cost of car insurance in November this year was £629, a £76 increase compared to last year.

Car insurers are hiking their prices as the cost of car insurance claims has risen, owing to an increase in the price of second-hand cars and higher vehicle repair costs.

Britons also face rising costs for home insurance, with the average price increasing to £151 in November 2022, up from £134 a year ago.

Analysts found premiums have increased as the value of household contents has gone up, along with the costs of materials and labour, making building repairs more expensive.

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In light of the increasing prices, Ms Barnes urged Britons to shop around to make sure they are getting the best deal.

She said: “Our research shows most households could save hundreds of pounds by shopping around for deals on their bills, such as car and home insurance, and could save even more looking out for deals on broadband and credit cards.

“Comparing prices online is one of the best ways to check you’re getting value for money.”

The researchers found households could save up to £492 by switching their car and home insurance. The figure includes saving up to £328 on motor insurance and up to £164 on home insurance.

The group also found one in three people could save up to £188 by switching their broadband deal.

Experts from savings group Loop claim people can save up to £1,000 in gas and electricity costs this winter.

The group said consumers should only use their heating when they are at home and turn it off 20 minutes before they need to as radiators will stay warm for that period.

People who are leaving their home for a period of time are also recommended to lower their thermostat to five degrees.

Every degree someone lowers their thermostat equates to a 10 percent reduction in gas use which is £300 a year in savings for an average home.

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