When the moratorium ends on Tuesday, millions of UK households will experience acute financial distress. Electric, water, and other utility bills are expected to rise, placing further strain on already cash-strapped families. The colour TV licence fee will increase by £5 a year, to £174.50. This change is only the first step in a larger effort. Soaring water and energy rates are adding insult to injury by further taxing household budgets across the country.
For most families, the biggest impact will come through exploding energy costs. The government’s industry regulator Ofgem today confirmed a 6.4% hike in the cap on energy prices. The net effect of this change is that consumers will end up paying £111 more. Energy supplies and prices are always highly sensitive to shock. The pace of this increase has, over the last three years, been fuelled by the impact of Russia’s invasion of Ukraine. Households are now staring at an average yearly gas and electricity bill that is £600 more than before the war started.
Water bills would change greatly in accordance with the provider. Southern Water customers are set to pay an average annual bill of £1,849. This figure represents the expected cost for an average dual-fuel household on a standard variable tariff. By comparison, residents served by other water utilities could pay an average of £603 a year. Areas of the country can expect drastic hikes in water rates. For example, residents of Bradford, West Yorkshire, will see a 9.99% increase, while residents of Newham, East London, will see their bills go up by 8.99%.
Utilities increasing their rates at a staggering pace. For the 2025-26 fiscal year, the average annual bill for a typical band D property in England will have reached £2,280. However, Wales are certainly not immune from these rises, with an average band D increase of 7.2%. On the ground in Scotland, at the same time, the majority of households will face a council tax rise of at least 7.5%.
The Liberal Democrats have strongly condemned these booming costs and called on government ministers to act now. Party leader Ed Davey said, “the next Prime Minister needs to get a grip on soaring energy bills, and quickly.” They are advocating for the introduction of an energy “social tariff” aimed at protecting vulnerable individuals living in fuel poverty.
Recognizing the pain in the pocketbook, elected officials are trying to do something to soften the blow. One flange op remarked, “We’re building our homegrown power as fast as we can. To help householders keep their bills down, we’re extending the £150 warm home discount to some six million households this winter, and we’re upgrading thousands of homes so they’re warmer and cheaper to heat.”
With April fast approaching, families up and down the country need to be protected from these huge hikes in their outgoings each month. Rising energy prices, rising water bills and rising council taxes—this trifecta of unaffordable costs—have left many households unable to cope. These fiscal pressures create significant challenges for families trying to stretch their household budgets.