Household bills have increased by £747 in the last 12 months, with insurance pushing up prices by nearly £100.
Home and car insurance bills have leapt as part of a increase in household bills over the past year, with data from Compare the Market showing the average cost of home and motor insurance increased by £88.
The spike in insurance bills is mainly due to a jump in car insurance premiums. The typical cost of car insurance is currently £613 – an £81 or 15 per cent year-on-year increase – with the average cost of home insurance now £159 – a 5 per cent increase.
The cost of premiums is increasing as insurers raise prices in response to the higher cost of claims.
Overall household bills, including energy, insurance, water, and council tax, now typically cost £5,785 per year – up from £5,038 in 2022.
Cost increases mean household bills now take around 18 per cent of average annual earnings, up from 16 per cent last year.
Aside from motor insurance, energy bills are to blame for increased costs with the average bill now £2,500 due to the Government’s energy price guarantee. This is £529 more than in April 2022, when the price cap was set at £1,971.
Water bills and council tax have also risen, while broadband, TV, and mobile phone bills are set to jump this month, dealing yet another blow to household finances.
Hélène Barnes, cost of living expert at Compare the Market, said: “Millions of households will be worried about shocking increases in recent bills, with many seeing the cost of their energy bills and car insurance increasing faster than inflation. This will put further pressure on households that are already struggling with the rising cost of food and housing.”
Rising bills come against the backdrop of spiralling rents and mortgage costs.
Figures from the ONS show average monthly mortgage repayments have jumped by £481 for a household taking out a new mortgage with a 25 per cent deposit, with an interest rate of 5.05 per cent on a semi-detached home worth £286,000.
Many people are looking for savings in non-essential spending to meet the rising cost of living but a separate survey from Compare the Market also found that only one in five households have shopped around to save money on car insurance and 16 per cent on home insurance.
Barnes added: “During this difficult time, people must take the time to look for savings, so they don’t pay more than they need to. Most households could save a significant amount of money 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.”