Cost of living shock: average UK household pays £441 extra per month in bills

• Royal London cost of living research reveals how families are being impacted by spiralling overheads 
• Average bills for UK households with children and pets have jumped by almost £500 per month 
• People without children or pets have seen their outgoings soar by £427 a month including housing and energy costs 

The full impact of the cost of living crisis has been laid bare by new research showing that people are paying an average of £441 a month extra on household bills in the 12 months to February. Those with children and pets are the worst affected, with their total monthly bills soaring by £497 a month, on average.

Royal London’s latest cost of living research, carried out with 4,000 adults, found the average household’s rent or mortgage payments had jumped by £208 a month while energy bills, one of the main drivers of headline inflation, had shot up by £141 a month. 

Average monthly grocery bills, meanwhile, rose by £122 per person amid weather-related shortages of fruit and vegetables, and a number of other challenges, including the rationing of eggs as the UK faces a major outbreak of bird flu.

The research found that childcare costs have spiked by £97 a month, on average, while the cost of keeping a pet has jumped by £68 per month. However, respondents in the survey were more likely to be concerned about the cost of pets (45%) than childcare fees (32%). Pet owners aren’t the only ones to be concerned as the government has called for manufacturers of pet foods to do more to help customers.

In total, the average hike in overheads faced by a household with children and pets was £5,960 per annum - compared with £5,120 for those without.

The “kids and pets” demographic - which accounts for around 16 million households nationally - was hardest hit in Glasgow where monthly bills rose by £544.

Millions say they face crisis as rainy-day savings are eroded

Around a third (31%) of UK adults said they were either overdrawn on their accounts at the end of the month or had to borrow money to make ends meet; while one in five said they were either “in financial crisis” (meaning they couldn’t cover their basic bills and food costs) or close to it. 

A similar number (21%) have used some or all of their savings to cover cost of living expenses and almost one in five (18%) of those had used between £2,000 and £5,000 of their savings.

Almost a third of those surveyed said they would be paying less into their savings in the future or would stop saving altogether to help meet the rising cost of bills.

The research comes at a time when inflation remains very high, despite economists predicting the worst is over, while millions of households saw their council tax, mobile phone and broadband bills rise sharply in April, further adding to the pressure that many are under.

Sarah Pennells, consumer finance specialist at Royal London, commented:

"Rocketing prices have caused hardship for millions of people across the UK, but it’s been an especially bumpy ride for people with childcare and pet costs, who have seen their outgoings rise by 24% more than everybody else.

"Unsurprisingly, rainy-day funds have been depleted and households now face a deft balancing act as they try and make the money they have coming in stretch as far as possible. It’s worrying that one in three people are going into the red at the end of the month or borrowing to make ends meet. 

"In these difficult times, it’s important to revisit the family budget regularly and see if there are any further savings you can make on your day-to-day spending. But it’s also important to seek help, whether that’s from your energy supplier or bank, or from a debt advice charity, if you need it. Most organisations would rather you contact them if you’re in difficulty, so don’t be afraid to ask for help."

Tips for people struggling with the impact of the increased cost of living:

1. Find out where your money’s going
   
   Start by finding out where your money’s being spent. It sounds obvious, but we may not realise exactly how much we’re spending each month – and what we’re spending it on – until it’s laid out in front of us.
   
   Get your last three bank statements and credit card bills (or check online) and spend some time going through them, highlighting any areas where you think you’re spending money unnecessarily or spending too much. This could be on anything from a top of the range broadband package that you don’t need, to a mobile phone contract where you’re paying for data you don’t use.
   
   Every month money is wasted on unused subscriptions, with gym memberships being the most common example.
   
   
2. Don’t bury your head in the sand, ask for help if you’re struggling with your energy bills
   
   Over two thirds (68%) of UK adults haven’t approached anyone for help with the cost of living crisis. If you’re finding it hard to pay your energy bills, contact your energy provider to discuss ways you can pay them. They should agree a payment plan with you, which takes into account your current income and what you owe. Contact Citizens Advice if you can’t agree a plan.
   
   
3. See if you can reduce your Council Tax bill
   
   Depending on your circumstances and who is living with you, you may qualify for a council tax discount. For example, you can get a 25% discount if you’re the only adult living in the property (or if the other adult is, for example, a full-time student or has severe dementia). Find out what discounts are offered by your local council at GOV.UK.
   
   People in Northern Ireland pay rates rather than Council Tax and different rules apply.
   
   
4. Check if you’re entitled to state benefits
   
   Billions of pounds of state benefits go unclaimed each year, and you could be missing out. The national charity Turn2us has a free and confidential benefits calculator on its website, which can help you work out which means-tested benefits you’re entitled to. It also has a grant search tool for information on grants you may be able to apply for.
   
   
5. Get help with unmanageable debts
   
   If you are struggling to pay for the essentials, you are using one credit card to pay off another, or your debts are causing you worry, then contact a debt advice charity, such as StepChange or National Debtline. They will be able to give you help with your debts, free of charge.
   
   
6. Reduce your food bills, if you can
   
   Grocery bills can make up a big proportion of your household spending, so it makes sense to look for savings. Plan your meals for the next few days and write down your shopping list – this will help you avoid buying unnecessary items. Consider changing to a cheaper supermarket, or to different brands if you prefer a particular supermarket.