Households expect to need more than £200 extra per month to cover the increase in bills set to take place in April, according to Comparethemarket.com's latest Money Action Index.
The index tracks the proportion of households who are concerned about the rising cost of living and are taking action to get their finances under control. The latest index reveals that almost half of households (48%) found it difficult to pay bills in recent weeks. This increases to 61% of households with children at home. Households with children at home expect to need an additional £238 per month to cover April’s bill increases.
Despite the upcoming increase in bills, nearly six in ten (59%) households who are worried about rising costs have not taken steps to bolster their finances. Only 31% of households have taken action to save money. This is only a four-percentage point improvement from August 2022 when 63% of these households had not tried to improve their finances, despite costs continuing to rise.
In April, the Government's Energy Price Guarantee that caps the cost of energy bills will increase from £2,500 to £3,000. As a result, nearly eight in ten households (77%) expect to pay more for energy bills in the next six months.
More than a third of households (35%) expect the cost of broadband to rise as suppliers are set to introduce inflation-linked bill increases in April. A third of households (34%) expect the cost of their car insurance to increase and 28% expect higher home insurance bills. The latest data from Comparethemarket.com shows car and home insurance have increased by a combined average of £93 year-on-year.
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According to households, the most popular ways to save include reviewing outgoings on where to cut back (38%), searching for better deals online and switching providers (35%), and cancelling subscriptions (30%). The increasing cost of living has meant that one in five (20%) have been forced to borrow money from parents in the past month to cover regular bills. These households borrowed an average of £232. More than four in ten households (38%) have also helped friends and family to save money. Households helped others to secure average savings of £223.
To combat rising prices, households could save up to £533 by switching their car and home insurance through Comparethemarket.com. This includes a £374 saving on motor insurance and a £159 saving on home insurance. In addition, one in three customers could save an average of £188 by switching broadband through Comparethemarket.com.
Mark Bailie, chief executive of Comparethemarket.com, comments: “Millions of households will be concerned about a potential bill shock in April. Our figures show household bills already jumped by £1,316 in 2022, so further increases will mean many will struggle to make ends meet. Lots of families with children at home are now having to rely on parents and grandparents for additional financial support. During this difficult time, people must take the time to look for savings wherever they can and make sure they don’t pay more than they need to. Most households could save hundreds of pounds by shopping around for cheaper deals on their bills, such as car and home insurance, broadband, and credit cards. Comparing prices online is one of the best ways to check you’re getting the savings you deserve.”
