‘UK national price hike day’: what to expect and how to lessen blow

  • 3/31/2023
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The squeeze on household budgets will increase from this weekend when a raft of price and bill hikes take effect. These concern everything from mobile phone contracts and council tax to the cost of stamps, NHS prescriptions and going to the dentist. Saturday, when many of the increases come into effect, has been described as “national price hike day”, while the fact that some of the increases come in over the next few weeks has led to some commentators labelling next month “awful April”. What’s happening? UK consumers always face a wave of higher costs on or around 1 April, as that is the month when many official bodies and private firms increase their fees and annual bills. But this year things are different for two reasons. Some of these latest increases are the biggest for decades, or ever: some mobile phone customers are being hit with increases of up to 17.3%. The problem is that many of these bills and costs are linked to the official inflation rate, which has been running at 10%-plus in recent months. Some firms such as telecoms companies use consumer price inflation or retail price inflation, and then add a further amount on top – often 3.9%. And of course, people’s finances have already taken a battering as a result of much higher energy, mortgage/rent, food and other bills, so these hikes are arguably going to cause even more pain than usual. Can I avoid some of these rises? In some cases, yes. When it comes to broadband and mobile deals, if you are “in contract” – perhaps you signed up to a new tariff within the last year or two – the price rise is likely to be part of that, and in most cases this will mean you are not able to cancel penalty-free, according to Martin Lewis’s MoneySavingExpert website. It says the two main exceptions are Sky broadband and home phone packages, and Virgin Media broadband, home phone and TV. If you are not tied into a contract or are with a supplier that allows you to leave penalty-free – and that applies to millions of people – now could be a good time to switch to a new provider or renegotiate a new deal. Do not be afraid to haggle with your existing provider, as they will often pull out a better deal if you say you are leaving. It is possible that the regulator Ofcom will intervene at some point to give people greater certainty and clarity from the outset about the prices they will pay, but don’t hold your breath. What about some of the other costs? NHS dental charges do not increase until 24 April, so if you need to visit the dentist, you may want to try to get an appointment very soon. Meanwhile, if you send a lot of letters, you may want to bulk-buy stamps now before the 3 April price hike. On council tax, it is worth looking at whether you are entitled to a discount. Households where everyone is a full-time student do not have to pay, and people who live on their own can pay a lower amount. You can also double-check whether your property is in the correct band. If it should be lower, you will get a reduced bill. With water bills, now may be the time to find out if you could save money by getting a meter. What sort of help is available? There is some help available for some of the big costs that people are facing. On energy bills, the government has announced a £900 cash boost for more than 8 million eligible means-tested benefits claimants, including people on universal credit, pension credit and tax credits. This will be paid into bank accounts in three instalments. There will also be a separate £150 for more than 6 million disabled people, which is to be paid in the summer, and £300 for more than 8 million pensioners during next winter. Council tax is – along with energy bills and a mortgage – a “priority debt”, where the consequences of falling behind can be worse than with other debts. However, every council has a scheme to help people manage their payments. Get in touch and see if it is possible to work out a new payment plan before you fall behind. Some people on certain benefits or a low income may be able to get their bill reduced to zero, says the government’s MoneyHelper website. With water bills, the industry body Water UK said recently that support for low-income households was being increased to its highest level ever. More than 1m households receive help, and this is being increased to 1.2m over the coming months. Is there any good news? It could have been worse. Average annual energy bills are not going up by £500 – from £2,500 to £3,000 a year – as originally planned from 1 April, after a recent government U-turn. And energy costs look likely to come down from the summer. Also, high inflation does at least mean that payments and benefits linked to one of the official rates are going up by more than usual, too. There are 5.9 million people on universal credit, and their payments will go up by 10.1% from April. The 12.6 million people who receive the basic or new state pension are also getting 10.1%. That lifts the new full amounts to £156.20 a week (up from £141.85) and £203.85 (up from £185.15) respectively. Meanwhile, about 2.5 million workers receive the national living wage or the national minimum wage, and these are typically going up by 9.7%.

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