A flurry of bill increases will land all at once in April which, together with the threat of more, could impact Chancellor Rachel Reeves’ standing among voters in the months ahead
This year’s April Fool’s Day will be no laughing matter for millions of already cash-strapped households. For if you thought money was tight now, things are about to get even tougher.
We already know about some of the price rises on the way, including water bills surging by an average 26% – or £123 – to a whopping £603 a year. Some suppliers are hiking prices as much as 47%, or £224. Then there is energy, with forecasts this week that regulator Ofgem’s price will rise another 5% – or £85 – from April, to a typical £1,823. The details will be confirmed next week. And it doesn’t stop there, with council tax, broadband and mobile contracts, along with the TV licence also going up.
Some prices rises on the way may have passed you by, including a big jump in road tax for many drivers. Owners of electric cars will have to pay vehicle excise duty for the first time, while those buying the most polluting models new face a £2,750 extra hit.
Other increases are less certain, not least the pass through of Chancellor Rachel Reeves’ hike in employers’ national increase and a higher national minimum wage, announced in the autumn Budget. The full impact will take time to filter through, although some firms will up prices more than others, and some not at all.
Another unknown is whether Royal Mail will hike the price of first class stamp yet again.
On the flipside, there are a number of boosts to many people’s income. The increase in the national minimum wage will give a financial leg-up to low earners, while the state pension will increase by 4.1% in April. On the latter, many older people will tell you it will make precious little difference in the real world, that it is not a catch-all, and that most lost the winter fuel payment. Inflation-linked benefits and tax credits will also rise by 1.7% from April.
Just how much better or worse off individuals feel could play a part in Mr Reeves’ standing. Worse off and more pressure will pile on the Chancellor – better off and she can focus on the longer term.
But people’s living costs could be side swiped by factors far outside her control.
One reason energy bills are so high is the fall-out from Russia’s invasion of Ukraine, and the spike in wholesale gas prices.
Efforts to resolve the conflict will impact costs going forward. And here – as it seems in so much at the moment – is the Trump factor. Whether it be Ukraine, or trade tariffs, the US President’s actions have the potential the feed through to so much of ordinary people’s lives.
