Energy bills will become drastically more expensive from April 1 as the new Ofgem price cap comes into effect, while council tax and water rates are also going up
Millions of homes will see their household bills rise from tomorrow as the cost of living crisis continues to bite.
Energy bills will become drastically more expensive as the new Ofgem price cap comes into effect, while council tax and water rates are also going up.
You may find your mortgage and mobile or broadband bill is also increasing from this month.
If you’re worried about budgeting, we explain everything going up from April 1 and what you can do to lower your costs.
Each week, we’ll also be hosting a Cost of Living Facebook Live special at 1pm every Thursday where we answer all your questions.
The energy regulator Ofgem is hiking its price cap by an unprecedented 54% in a huge hit for household bills.
For those on a default tariff who pay by direct debit, the price cap is going up by £693 from £1,277 to £1,971.
Prepayment customers will see a bigger jump, with their price cap going up by £708, from £1,309 to £2,017.
The price cap applies to everyone on a standard variable rate – so you’ll be on this if you’re no longer on a fixed deal, or if you were moved to a new provider after your old energy firm collapsed.
How the energy bills crisis affects you
But despite what the name suggests, the price cap isn’t actually a cap on your energy bill – instead, it sets a limit on the rates a supplier can charge for each unit of gas and electricity you use.
This means if you use more energy, you pay more, or use less and you’ll pay less.
If you’re really struggling, talk to your energy provider straight away to see what support they can offer you.
All the big energy firms have charitable hardship funds and grants that you may be eligible for.
Small changes around your home can also make a big difference, for example, turning off the lights when you leave the room and turning your appliances off standby.
Sadly, most of the big energy schemes including Warm Home Discount, Winter Fuel Payments and Cold Weather Payments are closing for the year but they will become available again in the autumn.
The average band D council tax rate in England will go up by 3.5% on April. This is up £67 compared to 2021-22 and brings the average bill to £1,966.
Council tax rates vary across the country so how much your bill will go up by depends on the rate set by your local authority.
You can search for your council tax band here or check your bill from last year.
If you’re worried about your council tax going up, it’s well worth checking if you’re eligible for a discount. You may be able to get anywhere between 25% and 100% off.
For example, those who live alone can get a 25% discount.
You may also be entitled to help through a Council Tax Support scheme, but this largely depends on your income, how many people are in your home and if you have children living with you.
Again, the maximum discount could be up to 100% off.
You may also be able to challenge your council tax if you think you’re in the wrong banding.
The average water bill will rise by around £7 to £419 from April, an increase of roughly 1.7%, Water UK announced last month.
This is just the average rise though – many areas will see a bigger hike of up to 10% on their water bill.
Many people assume you can’t lower your water bill but this isn’t necessarily the case.
It may be worth checking if you’d benefit from a water meter – the general rule is, if you have more or the same number of bedrooms in your house than people, then it is worth seeing if you can save cash.
You could also save water and cash by investing in special gadgets that regulate your usage. Save Water Save Money website has thousands of free devices that you might be able to claim.
Finally, the simplest way to lower your water bill is use less water in the first place. For example, shorten your shower by just one minute or turn off the tap when brushing your teeth.
Mobile and broadband
Pretty much all the major mobile and broadband providers are confirmed price rises. Some came into force in March but others will come into affect from April.
For example, TalkTalk is increasing its bills by up to 9.1% from April 1 and Vodafone customers will see their costs rise by up to 9.3% on the same day.
O2 and Virgin Media price rises of up to 11.7% will come into play this month as well, along with an up to 7.8% Three Mobile hike.
If you’re not happy with the price increases, then it could be time to start haggling.
Start by comparing prices and making a note of the best deal – take into account how many calls, text and data you currently use, and the speed you need for your broadband.
Once you’ve found the cheapest rate, call up your current provider and ask them to match it.
If they can’t beat it, tell them you’re planning on leaving to see if this lowers their deal. If they still won’t budge and you’re out of contract, you should then switch to the cheaper provider.
If you’re still in contract, you’ll likely need to pay an exit fee. Take into account how much this will cost and if the saving you’d make by moving is worth paying this charge.
If you’re a homeowner, you may find your mortgage is going up after the Bank of England increased its base rate from 0.5% to 0.75%.
The base rate impacts certain types of mortgages. If you’re on a tracker mortgage and interest rates are hiked, then your rates will go up as these move in line with the base rate.
Those who are on a standard variable rate (SVR) mortgage may see rates increase, as it’ll be down to your lender to decide whether to pass on the increase to its customers.
If you have a fixed-rate mortgage, your rates won’t change until your deal has ended.
Some banks and lenders have already hiked their mortgages in line with interest rates, while others will bring in higher rates from this month.
You may not see an increase until May, either way, your mortgage lender should let you know if your bill is going up.
Not all lenders have confirmed their new rates yet.
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