Household bills jumped almost £200 in 2016 as fall in sterling and added taxes took their toll

Francesca Washtell
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Energy, motor and home insurance premiums all became more expensive last year (Source: Getty)

Household bills leapt around 10 per cent last year, costing Britons almost £200 more than in 2015, according to price comparison site Compare the Market.

The combined cost of energy, motor and home insurance rose to £2,223 in 2016, compared to £2,032 the year before. Sharp hikes were registered in motor and household energy premiums, which rose by £96 to £691 and £100 to £1,383 over the year respectively.

Revved up motor bills can be attributed to the three hikes in insurance premium tax announce over the past two years, Compare the Market said.

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Overall declines in the price of wholesale energy throughout the year were undercut by the fall in sterling after the EU referendum in June, which made the cost of importing wholesale energy more expensive for British companies.

Wholesale costs soared in the later months of the year, especially during November, after dipping slightly in August.

The rise in home insurance was far more modest, increasing by £5 on average from £135 in 2015 to £140 in 2016.

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“The rise in the cost of bills is pretty devastating news for consumers who will inevitably be feeling significantly harder up as we go into 2017,” said Simon McCulloch, director at Compare the Market.

“Despite the fall in wholesale energy prices, the falling pound, caused by the Brexit vote, has made importing energy more expensive. Inevitably, the higher costs are being passed straight on to the consumer, adding almost £100 to people’s annual energy bill.”

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The hike in bill costs had undone what Compare the Market dubbed “an extremely positive year for consumers in 2015”. Average household outlays fell by £186 in 2015, but have now climbed back up to rise above a peak of £2,206 reached in 2014.

Figures released last month by GoCompare Energy warned that UK households could be starting 2017 more than £250 worse off, as dozens of fixed dual fuel energy tariffs came to an end on 31 December.

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