Household bills are set to soar today meaning the cost of living will rise on several different fronts.
Ministers have struggled to defend the changes which so-called “awful April” will be bringing in for people across the country – especially as Labour’s manifesto promised to make people better off by the time of the next election.
But there are different reasons behind the hike for each utility, from geopolitical uncertainty in Ukraine to Britain’s own struggling sewage infrastructure.
HuffPost UK walks you through all the changes, and explains the price increases behind them, here.
Why are energy bills going up?
Anyone who is on a variable tariff linked to the energy price cap will see their energy bills go up today – working out to around nine million households.
Energy regulator Ofgem sets the cap on gas and electricity charges, and they’ve bumped it up by £111.
That means the average annual energy bill will jump to £1,849 per year, compared to £1,690 last April.
This is still a long way off the peak from two years ago, when the government introduced the £2,500 energy price guarantee to prevent the average bill soaring to £4,000.
But it is the third hike in a row, and takes the average to £600 more a year for their gas and electricity than they were before Russia invaded Ukraine.
The hike comes down to global supply and demand – some of which is still trickling down from the Covid pandemic, as there was an energy demand surge when businesses reopened.
Supply has since stabilised, but demand remains high.
This year’s hike was also worsened by the geopolitical tensions, as European allies continue to avoid Russian gas imports.
Production costs have also risen which has been passed onto consumers, while Green energy transition – which will help long-term sustainability – is adding to short-term price hikes.
But energy companies have also been raking in high profits over the last five years, in part due to the climbing wholesale prices.
The top 20 companies have made £514 billion between them, worldwide, since 2020 – and £115 billion in the last year alone, according to End Fuel Poverty Coalition.
What is going on with our water bills?
Water bills are going up by an average of £123 (26%) for households in England and Wales this year, meaning the total price will be around £603 – or £1.65 per day.
But this will differ slightly due to the water company, depending on where people live.
Regulator Ofwat has decided to increase the amount firms can charge households to help upgrade their systems with new drains, reservoirs and sewers.
Ancient infrastructure has led to staggering amounts of sewage being pumped into our waterways.
But, water companies are also privatised and they want to turn a profit so they can continue receive investment from shareholders.
They face large debts too – the 10 largest companies have a £60 billion shared debt – which they need to pay off.
This has led to accusations that the money is just going to make a profit for the companies.
Charles Watson from River Action said: “The shareholders in these companies are just laughing all the way to the bank.”
What about Broadband, phone bills and TV licence?
According to Uswitch, mid-contract price rises are coming – and expected to raise a combined £74 million a month from April 1.
This is expected to add an average of £21.99 annual for those on inflation-linked contracts and up to £42 a year for those on newer plans which are subject to fixed increases.
Meanwhile, the annual cost of a colour TV licence will go up by £5 on Tuesday to £174.50 – having already risen by £10.50 last April.
You can get it for free if you or your partner is aged 75 or over and receives pension credit.
These increases are meant to cover the inflation we’ve seen in recent years and to cover business costs.
Is council tax safe from these hikes?
No – the tax you have to pay to your local authority is set to rise in England.
While larger councils are usually not permitted to increase this tax by more than 5% each year without triggering a referendum or local vote – it’s 2.99% for smaller councils – this year is different.
The government is allowing a handful of councils – Bradford, Newham, Birmingham, Somerset, Windsor and Maidenhead – to bypass the cap.
Some in Scotland, which have been frozen since 2007, are set to rise by as much as 10%.
In Wales, it may rise by as much as 15%, while Northern Ireland uses a domestic rates system instead.
This hike is meant to cover the funding gap councils are facing. Without an increase, they will have to stop some of their core services.
The government reduced councils’ spending power in 2021-22, which is why the general public is now having to fork out extra money to make ends meet.
What about driving your car?
Road tax is increasing by £5 a year for petrol and diesel car owners, taking the standard rate cost on post-2017 vehicles to £195 a year.
The exact amount depends on the year your car was registered and what type of fuel it uses.
Electric vehicles registered from April 2025 will no longer be exempt, but will pay the lowest rate of £10 in the first year and then go on to the standard rate.
This change is meant to increase tax revenues, and ensure farness for drivers no matter what kind of vehicle they drive.
There will also be higher tax rates for the first-year of new cars – and those rates will be double for higher polluting models.
Will stamp duty rise too?
Yes – this is the tax due if you buy a property (or land) over a certain threshold.
If you purchase anything under that threshold, you do not owe any tax.
Under the Conservatives, stamp duty was put at a threshold of £425,000 – up from £300,000 – for first time buyers if they purchase a home less than £625,000.
However, from April 1, Labour will take the limit back to down to £300,000.
The Tories’ change to the threshold level was only ever meant to be a temporary measures – and with the public finances in their current state, it is unsurprising that the current government have reduced the reduced rates.
Is that it?
Sadly not – the earnings threshold for income tax has been frozen meaning they will not rise in line with inflation.
This will trigger “fiscal drag”, meaning some people will be pulled into higher income tax brackets if their wages are going up.
The Office for Budget Responsibility estimates nearly four million additional people will have to pay income tax as a result, while three million will move to the higher rate, and 400,000 will be on the additional rate.
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