Energy bills have risen by 40% in five years, taking average UK household costs up to a record of £2,707 a year, research has revealed.
Comparethemarket’s study examined the costs of energy, home and motor insurance since 2015, and found that gas and electricity price increases were largely responsible for this year’s changes.
The analysis says financial pressures have worsened despite the energy price cap introduced at the beginning of 2019. Dual fuel bills now cost an average of £1,813 a year, a 40% hike from £1,289 in 2015.
The cap has led to many providers, particularly the big six – British Gas, EDF Energy, E.ON UK, npower, Scottish Power and SSE – raising their prices.
The annual report did not examine the costs of broadband, mobile or TV services, which also involve heavy outlays.
Simon McCulloch of comparethemarket.com said: “A lot of attention during the general election was devoted to financial difficulties that many people face around the UK.
“These statistics are a stark reminder of not only the high cost of essential services, but of the huge increases that have been seen in the past few years. The average cost of energy, motor and home insurance is now £675 higher than 2015 – far above the rate of inflation.”
According to the Office for National Statistics’ composite price index, items that have risen in line with inflation are 11.59% pricier now than in 2015.
The analysis draws attention to the regional disparities in utility costs, finding that London households were paying £3,129 a year – over £400 more than the national average.
In contrast, those living in Scotland spend only £2,470 on bills, despite experiencing colder weather than the English capital. Lower bills are largely because of significantly cheaper Scottish car insurance.
The West Midlands is the UK’s second most expensive region, with bills averaging £2,910 in 2019.
While the cost of car and home insurance has remained broadly unchanged this year, there are indications that motor cover will rise over the next year. Comparethemarket attributes this to mooted delays to reform of personal injury claims for whiplash injuries and changes to the Ogden rate, used to calculate compensation payable to victims of traffic accidents.
McCulloch said consumers should always look around for better deals. “With the average saving for these products standing at £482, shopping around clearly goes a long way to mitigating the dramatic bill increases we have seen in recent years,” he said.
The energy cap is due to expire by 2023. Ofgem, the government regulator for gas and electricity markets, has previously said “it will be up to the government to consider if the market is working well enough for the cap to be removed”.