Millions of householders across the UK are bracing themselves for a tough year ahead following a rise in several household bills on 1st April. The new financial year has brought no good news for a nation whose population has already been facing economic challenges since the Covid-19 pandemic of 2020. Five years down the line, the latest price hikes are likely to strain budgets even further.
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From April 2025, household bills including water rates, council tax, energy prices and telecom services have gone up, putting extra pressure on finances already stretched to breaking point. The increases come less than a week after chancellor Rachel Reeves announced a raft of welfare benefits changes likely to leave some worse off. A planned shake-up of health and disability payments by the Department for Work and Pensions will leave an additional quarter of a million people, including 50,000 children, living in relative poverty by 2029/30, according to projections.
The changes are aimed at saving the government more than £5 billion over the next five years, but with household bills for the 2025/26 financial year dropping through letterboxes, more people are expected to join the 21.7 million already classed as living in poverty.
According to data published by the Commons Library, the latest figures show 11.6 million UK residents live in “relative poverty”, which means their income is significantly lower than the national median income. This means they can’t afford the same standard of living as other households, although their basic needs may be met.
A further 10.1 million Brits live in “absolute poverty”, where they can’t even afford the basic necessities in life, including food, shelter and healthcare. The figures were released by the Department of Work and Pensions for the Commons’ Poverty in the UK report as part of the government’s investigation into standards of living. Launched in 2024, the report will be used as the basis for initiatives to alleviate child poverty in 2025.
How are people managing?
Data from the Money and Pensions Service shows 2.3 million low income families have taken out loans or credit cards to pay household bills, including logbook loans for bad credit secured on their vehicle for borrowers who don’t have access to mainstream credit. People who choose this course of action are advised to use responsible lenders regulated by the Financial Conduct Authority.
A worrying trend reported by the End Fuel Poverty Coalition is householders borrowing money illegally, at excessively high interest rates. The ‘Warm This Winter’ survey suggested 18% of UK adults had turned to illegal lenders in 2024. The figure was higher in younger demographics, with 24% of people aged under 35 and 32% of 36 to 44-year-olds using this unreliable and often dangerous source of extra income.
Planning for household bills per month isn’t something any of us relish, but unfortunately, it’s a necessity. To weather the current storm, householders are urged to determine how the increases will affect them personally and work out ways to manage their budget in the challenging situation we’re all facing.
Water bills
Householders in England and Wales face an average increase of £10 a month for water bills, but the rise will vary significantly, depending on your local region and water supplier. Yorkshire Water customers will see an increase of 28% compared with the 2024/25 financial year, pushing up bills from £467 to £602 annually. The outlook for Thames Water customers is bleaker, as they’re facing a 31% rise from £488 to £639 per year.
Experts say you can potentially save hundreds of pounds a year by installing a water meter. Installation is free in England, but you need to apply directly to your water company, often through their website. If in any doubt, contact your supplier for a no-obligation chat on how metered water works.
Other options include checking your eligibility for an assessed charge, based on various factors including the number of residents in your home, or applying for a social tariff, which can be significantly cheaper. Contact your water company, or Citizens Advice, for further information.
Council tax
The majority of householders in England are facing the maximum council tax increase of 4.99% for 2025/26. The government has capped bills nationwide to prevent huge price hikes, but in some regions, local authorities have been given permission to exceed the cap without a referendum. This occurs only under exceptional circumstances, usually when the local authority is suffering serious financial issues. For example, residents in Bradford are facing a 10% council tax increase; Newham, Windsor and Maidenhead are introducing a 9% rise; and Birmingham, Trafford and Somerset a 7.5% hike.
The average bill in England on a Band D property will now be £2,280 (an increase of £109 per year) but this could be higher in areas where the price cap has been exceeded. Wherever you live, check with the council whether you qualify for a discount, as you may be eligible for a reduction of between 25% and even 100% off your bill, depending on your personal circumstances.
Most districts send a bill for monthly payments based on a ten-month cycle. If you’re struggling with money, ask the council to spread the costs over 12 months to reduce the monthly outgoings. They’re usually happy to oblige if residents explain they’re suffering hardship.
Energy bills
Customers on a variable tariff linked to the energy price cap will have seen costs increase on 1st April. Prices in England and Wales have risen by an average of £111 a year as a result of watchdog Ofgem increasing the cap.
The average household’s annual bill has now gone up to £1,849, although this will vary depending on the amount of energy you use and your supplier. In April 2024, the average energy bill was £1,690 per year, whereas it was only £1,200 back in 2020. According to the National Energy Action group, the number of UK households living in fuel poverty is 6.1 million, as of April 2025.
Experts recommend reading your meter regularly to avoid estimated bills, and keep a check on periods when you’re using more energy to determine which appliances or activities are causing the drain. For accurate bills, send your energy provider meter readings monthly. It may be worth swapping onto a fixed tariff to bring costs down, as this protects customers from an unpredictable market and price rises.
Telecom services
According to comparison website Uswitch, price rises are kicking in for customers of a number of mobile and broadband companies, bringing in £74 million of extra revenue for service providers nationwide.
New rules introduced by telecoms regulator Ofcom in January 2025 mean service providers must tell customers upfront about any impending price rises, ensuring they’re made aware of how it will impact them “in pounds and pence”. However, this is usually applicable only for new customers.
Average increases of between £22 and £42 a year are expected for existing customers. This can vary depending on your service provider and when you took out your contract. For example, an EE customer who took out a mobile phone contract before 10th April 2024 will face an increase of 6.4% this month. Virgin Media broadband customers have been faced with a 7.5% rise in bills from 1st April.
This can be a tough one to manage, as most telecoms contracts don’t allow customers to cancel mid-term without incurring a financial penalty. However, if your contract is nearing its end, it’s worth phoning your provider to haggle for a better deal, or to shop around if one isn’t forthcoming.
The key is to face the challenges head-on, working out your budget, to avoid nasty surprises further down the line.
