While owning a home is many people’s pathway to future financial stability, the rising cost of living is having a major impact on household finances.
If you’re looking to the future and wondering what costs you could soon be facing, here are some of the average running costs and bills for UK homes.
Why are household costs rising?
From essentials to bills and popular household goods, everything is more expensive. Inflation is having a major impact on UK households and is currently 3.9%.
There are several different factors driving the current level of inflation - and households are facing higher than normal costs.
What are the average energy bills for homes in the UK?
Average energy bills always vary a little.
From the provider of your heating and electricity to the systems you use, even down to how energy efficient your property is, there’s no set amount for how much you should pay.
However, depending on how many bedrooms and how large your house is, you should expect to be in line with some of the following estimates.
Please note that if you don't pay by direct debit, the amount you'll pay will be higher.
Average bills for a one-bedroom flat
A one-bedroom flat is one of the cheapest ways to live when you discount rent.
The average electricity bill for a one-bedroom flat using 1,800kWh every year is £60.42 a month or £725 annually if you pay by direct debit, according to British Gas.
The average gas usage for a one-bedroom flat is around 7,500kWh over a year, which comes to an estimate of £713.19 a year, or £59.43 a month.
Average bills for a three-bedroom house
Costs inevitably rise in any flats with more than one bedroom, as gas and electricity need to be used more often.
In a year, you should expect your average electricity bill to reach £983.21 and £1,025.48 for gas.
Average bills for a five-bedroom house
The bigger the property, the more energy that needs to be consumed.
And with gas and electricity bills remaining high, it’s become more expensive for households.
The amount you pay will, of course, vary depending on how large your rooms are and how well insulated your house is.
For electricity for a five-bedroom house, on average, you'll use 4,100kWh, which will cost £115.40 a month or £1,384.85 annually.
For gas, five-bedroom houses typically use around 17,000kWh, which translates to around £121.24 per month or £1,454.89 annually if you pay by direct debit.
What other bills do households face?
But it’s not just energy bills that can be a major drain on household finances.
Council tax is paid by eligible people living in a property.
The amount you pay can vary drastically from one council’s borders to the next and also based on the value of your property.
You will also need to factor in the cost of broadband, which will vary depending on which provider you choose, but will normally average between £25 and £45 a month.
You will also need to consider the cost of:
- Home and contents insurance: If you already have, or are considering, taking out house and contents insurance, this is another cost to keep in mind.
- Phones: From landlines to smartphones, you will also need to pay for monthly data or minutes.
- TV licence: If you have a TV that you use to watch terrestrial TV, you’ll also need to pay for a TV licence, which normally costs £159, rising to £169.50 from April 2024.
- Maintenance: Ongoing maintenance costs can be an unexpected headache, especially for homeowners who will need to foot the bill. Whether a boiler has stopped working or a pipe has burst, maintenance repairs can cost hundreds.
- Water bills: While you’ll only pay water bills every few months, this can still represent a sizable outgoing.
- Mortgages and rent: By far, the largest bills that homeowners and renters pay is the cost of living in their home. From mortgage payments to rent, you will need to pay thousands every year.
Learn more: Can I get a discount on my council tax bill?
Tips for keeping bills low
While bills have risen for households up and down the country, there are some easy steps you can take to keep costs low.
- Work out how your water bill is calculated: If your water provider calculates your bill based on an unmetered formula, your bill is calculated based on your home’s ‘rateable’ value, which includes your home’s size, location, and other factors. Moving to a metered formula could lower your bills.
- Review your broadband package: While it can be nice to have premium channels and add-ons, reducing your broadband package and focusing on a basic deal can save you lots of money. However, beware of any hidden or early cancellation fees.
- Improve your draught insulation: Improving your draught insulation is one of the best ways to stop your home from losing additional heat. From insulated windows to blocking out gaps in flooring boards, you can save potentially hundreds of pounds by improving insulation.
- Get a new boiler: New boilers are far more energy efficient than previous models, and can reduce your fuel bills by up to 30%.
High costs are a concern for many.
If you need help planning your finances and making sure that you can manage your money as well as possible, speaking to a financial adviser can help. Find your next adviser with Unbiased today.
If you found this article insightful, you might also find our guide on what is a good salary in London informative, too.