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There is “light at the end of the tunnel” for households this spring as bill increases are expected to be at their lowest since 2021 – with pensioners set to see a boost to their finances.
April is often dubbed “Awful April” because of the extremely high increases to costs that many households face – and last year was one of the worst yet.
While there are still increases to come, they are lower than previous years with pensioners getting a welcome increase to their state pension. Below i outlines the changes expected this April.
Inflation
April bill rises are sometimes based on inflation figures in January, February or March, when inflation a year ago was even higher – above 10 per cent.
While inflation is still above the Bank of England’s 2 per cent target, now at 4 per cent, it is much lower than when it hit double digits.
Inflation affects many of the bill increases households see, including their mobile and broadband costs. Lower inflation figures this year mean these bills are set to rise by a far smaller amount than they did in the past two years.
Food and drink inflation sat at 19 per cent in April 2023 but is currently at 8 per cent and easing. Although this doesn’t mean costs are going down, they are rising at a slower rate.
The news comes as official data shows that wages are still growing at a faster rate than inflation, with average regular earnings growth at 6.2 per cent in the three months to December, above inflation at 4 per cent. This means people are still being paid more than the rate of which prices are increasing, on average.
Pension boost
April is more positive for pensioners, who will see their state pensions go up by 8.5 per cent – in line with average earnings growth last summer – under the Government’s triple lock policy.
The state pension increase means that those receiving the full new state pension will go from getting £203.85 a week to £221.20 – which equates to £11,502 per year.
Those who retired earlier and are on the basic state pension will go from getting £156.20 per week to £169.50 – which equates to £8,814 per year.
Pension credit, which gives extra money to pensioners to help with their living costs if they’re over state pension age and on a low income, will also be uprated by 8.5 per cent.
A number of benefits will also be uprated in April including universal credit, personal independence payment and housing benefits. However, those receiving benefits are probably some of the most vulnerable in society and so will still be feeling the long term effects of the cost of living crisis.
Energy bills
Predictions from Cornwall Insight suggest that in April, the energy price cap will fall by 16 per cent – from £1,834 a year for a typical household to £1,620 a year.
Prices are forecast to remain lower than current prices throughout 2024, falling to £1,497 a year in July, before rising slightly to £1,541 in October.
Although calculated slightly differently, last April, the energy price guarantee set by the Government meant bills were £2,500 for a typical household.
Richard Neudegg, of price comparison site USwitch, said customers would feel “relief” if energy prices were to drop. “Current energy price cap predictions for April suggest there could be some light at the end of the tunnel. Households have had their finances stretched by record-high energy bills this winter, so a predicted 16 per cent drop in rates will be welcome news,” he said.
Many pensioners had to cut back on their heating for the past couple of winters due to rising bills so a substantial cut to bills will come as welcome news.
Mobile and broadband bills
Consumers often see mid-contract bill rises in April.
Average broadband and mobile bill increases this spring will be around 7.9 per cent, as most providers increase costs by inflation plus an extra percentage on top, according to analysis by USwitch.
For a broadband customer with an average monthly bill of £29.47 per month, this will mean an increase to £31.80.
But the increase is far less than last year, when consumers saw eye-watering rises.
In 2023, many firms introduced mid-contract increases of up to 17.3 per cent, as they upped prices by the Retail or Consumer Prices Index measure of inflation plus up to 3.9 per cent.
And the year prior, in 2022, bill increases were typically 9.4 per cent. Increases were last lower back in 2021, when they were 4.6 per cent.
Mr Neudegg added: “This year’s broadband and mobile bill increase is expected to be around 7.9 per cent. While this is lower than the 14.4 per cent that the majority paid last year – this means customers who haven’t been able to switch, or have chosen not to, could be paying an aggregate 23 per cent more since March 2023.
“All mobile and broadband customers should check to see if they are in or out of contract, and consider switching to a cheaper deal as soon as they are able to prevent overpaying. Our own data shows that broadband customers can save an average of £179 a year by switching their provider.”
Other bills
Customers will also face some other bill increases in April, though generally these are lower than last year.
Water bills are set to rise by average of 6.2 per cent in England and Wales, compared to 7.5 per cent last year. Council tax rises will also be seen, and these will be up to 5 per cent for most people in England.
Prescription charges often increase in April although this has not yet been confirmed.
