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 becoming more expensive. Inflation is having a major impact on UK households, having risen to its highest level in 40 years.
There are several different factors driving the current level of inflation, from the impact of the war in Ukraine to global shortages in production. All of which means that households, whatever their size, are facing higher than normal costs.
What are the average energy bills for homes in the UK?
Average 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.
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 use for a one-bedroom flat is around 1800kWh, which would come to an annual bill of around £302.58 a year – or £25 a month. If you’re on a standing charge, you could also expect to pay between £75-90 a year.
The average gas usage for a one-bedroom flat is around 6000kWh over a year, which comes to an estimated figure of roughly £190.20 a year, and £15.85 a month. Standing charges over the year are likely to come to £92.24.
Excluding rent, you could expect to pay average bills of around £669.26 for a one-bedroom flat.
Average bills for a two-bedroom flat
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 bills to come to around £784.
Average bills for a two-bedroom house
Houses inevitably cost a lot more to run than flats, as there are more rooms and often, more energy needs to be consumed. And with gas and electricity bills on the rise, it’s only getting more and 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, two-bed houses use around 2100 kWh of electricity per year, which comes to a bill of around £353.01 a year, or around £35 a month. You’ll need to factor in standing charges that come to around £85 a year. This means that for a year, you’d pay around £438.01.
For gas, two-bed houses typically use around 10,000kWh, which translates to a cost of about £317. Including a standing charge of around £95, you can expect to pay gas bills of around 412. Over the year, you can expect your energy bill to come to a total of £850.01.
Average bills for a four-bedroom house
Four-bedroom houses use significantly more energy, resulting in higher bills. For electricity, you can expect to pay an estimated £1,144.25, while for gas you should expect to pay around £1,148. In total, your bills could be as high as £2,292.
What other bills do households face?
But it’s not just energy bills that can be a major drain on household finances. Council taxes are paid by eligible people living in a household out of their post-tax income, which can be another added stress. Especially because the level of council tax eligibility varies drastically from one council’s borders to the next, and also the age of your property.
You will also need to factor in Wi-Fi costs. These will also vary depending on which provider you choose to go with, but normally average between £25 and £45. Beyond these, you will also need to include:
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.
Mobile phones: From landlines to personal devices, you will also need to use your phones.
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 costs normally around £159.
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 current house. From mortgage payments to rents, you will need to pay thousands every year to stay in your current home.
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 keep your bills lower.
Cut back on your broadband package: While it can be nice to have more premium channels and add-ons, stripping back your broadband package and focusing on a basic deal can save you lots of money. Although 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 30%.
Rising 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.