The cost of running a household has risen by 25 per cent in the last five years, with some bills having soared by 67 per cent, according to new data from price comparison site uSwitch.com.
The figures come alongside pay increases of just 6 per cent over the same period. Consumers are currently more worried about the rising cost of living than they are about their health, the surveyor claims, and are calling on the Chancellor to stem spiralling household bills before he tackles the economy at large.
Of the changes to essential household bills the most significant in the last five years related to the cost of running a car. Comprehensive car insurance has risen 67 per cent since 2008 from an average of £684 a year to £1,140.
Unprecedented hikes in petrol prices mean that a two car family can now expect to spend £331 a month filling up their cars, up 33 per cent from £250 a month in 2008. The situation is unlikely to improve any time soon, with the AA predicting petrol prices hitting their highest ever level by Easter.
Energy bills are also a major cause for concern, with the average household now shelling out £67 a month for gas and £45 a month for electricity – increases of 52 per cent and 32 per cent respectively since 2008. Water bills have not escaped the hikes, with homes now seeing average bills of £32 a month, a jump of 13 per cent since 2008.
The 24 per cent rent hike, from £467 to £577 a month, has hit consumers hard. The 0.5 per cent interest rate since 2009 may have helped some mortgage holders, but with predictions that the average house price will climb to £219,000 this year, first-time buyers are facing an increasingly tricky time.
Food bills have climbed 17 per cent since 2008 with the average weekly shopping bill rising from £220 to £256 a week. Prices have risen 4.5 per cent in the last year alone, with vegetables up 8.4 per cent and fruit up 7.2 per cent after rain devastated harvests.
Broadband is the shining star in the shopping basket of bills, actually witnessing a 68 per cent decrease since 2008. The average cost of standalone broadband is now just £5 a month, compared to £17 a month five years ago. Unfortunately, this drop is offset by the cost of having a landline – required for most broadband to operate – which has risen 31 per cent from £12 to £15 a month.
Against the backdrop of rising bills, wages are failing to keep up. Average salaries have risen 6 per cent from £24,900 a year in 2008 to £26,500 at the end of 2012. In real terms, however, the value of UK workers’ wages has fallen back to 2003 levels, with salaries plummeting by 4.5 per cent between 2007 and 2011. Just one in two consumers (52 per cent) have had a pay rise this year; more than one in three (36 per cent) have had their pay frozen for 12 months or more and one in eight (13 per cent) have actually had their pay cut.
The relentless bill hikes are placing unprecedented levels of pressure on consumers. Over half say that the rising cost of living is their biggest cause for concern at the moment, compared to the 29 per cent who are most concerned about their health.
Michael Ossei, personal finance expert at uSwitch.com, says: “People want the Chancellor to show that he really does recognise the challenges they are facing and to help ease the strain on family finances. But consumers also need to help themselves by not burying their heads in the sand and realising that there are options open to them. The first step is to take a long hard look at your household budget to see where you can cut costs. Making sure you are on the best possible deal for your home essentials will help you to ease the financial pain and to beat price rises.”
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