Basic household bills have increased by an average of 43 per cent in the last decade 鈥 more than double the rate of wage growth, new research2 from Santander shows.
Analysis of government data also reveals that bills for Council Tax, TV, phone, broadband, gas, water and electricity have, on average, increased 10 percentage points more than inflation over the past 10 years.
Gas and electricity are the biggest drivers of price increases, rising 73 per cent and 72 per cent respectively in the last decade, while water bills have increased by 41 per cent 鈥 all significantly higher than inflation at 32 per cent. Council Tax has risen by 27 per cent and TV, phone and broadband prices have all risen by 24 per cent, albeit slower than inflation but still faster than wage growth (19 per cent).
Table One: price rises over the past decade
| Year | 2006 | 2016 | Change |
| Inflation | 3.20% | 1.80% | 32.2%3 |
| Median wage | 拢19,375 | 拢23,099 | 19.2% |
| Household bills | 拢2,148 | 拢3,063 | 42.6% |
Source: Santander, 2017
Household bills continue to squeeze incomes as an eighth (13 per cent) of the average UK adult鈥檚 salary is spent paying basic domestic bills. Over the course of a lifetime4, people will fork out an average 拢524,464 on bills, with those in London set to spend the most (拢601,638), closely followed by people in the South East (拢580,566). However, it鈥檚 those living in the South West who will spend the largest proportion of their salary on basic household bills - with almost a sixth (15 per cent) of their earnings going towards them over the course of a lifetime.
Table two: Total lifetime expenditure and income
| Region | Median annual salary | 2017 spend on bills | Lifetime spend on bills | Share of income |
| London | 拢32,326 | 拢3,608 | 拢601,638 | 11.2% |
| North East | 拢21,788 | 拢2,758 | 拢459,861 | 12.7% |
| Scotland | 拢23,537 | 拢3,028 | 拢504,796 | 12.9% |
| West Midlands | 拢22,333 | 拢2,886 | 拢481,117 | 12.9% |
| Yorkshire and The Humber | 拢21,808 | 拢2,945 | 拢491,049 | 13.5% |
| South East | 拢25,205 | 拢3,482 | 拢580,566 | 13.8% |
| North West | 拢22,192 | 拢3,075 | 拢512,639 | 13.9% |
| Wales | 拢21,372 | 拢2,989 | 拢498,386 | 14.0% |
| East | 拢22,978 | 拢3,223 | 拢537,402 | 14.0% |
| East Midlands | 拢21,744 | 拢3,099 | 拢516,699 | 14.3% |
| South West | 拢21,824 | 拢3,308 | 拢551,605 | 15.2% |
| United Kingdom | 拢23,723 | 拢3,145 | 拢524,464 | 13.3% |
Source: Santander, 2017
Matt Hall, Head of Banking and Unsecured Credit at Santander, said: 鈥淗ouseholds have been hit hard as the cost of bills and other goods continue to rise. With increased prices across a variety of key household items, families will be looking for ways to make their money go further.
鈥淭here are a number of things people can do to reduce the cost of their household bills. From installing home energy monitors to analysing their energy usage or changing their electricity supplier or mobile provider, people can save a small fortune. Santander鈥檚 1|2|3 and 1|2|3 Lite current account pays up to 3% cashback on essential household bills and these factors combined could create significant additional savings over time.鈥
Santander鈥檚 1|2|3 Current Account offers an interest rate of 1.50 per cent on balances up to 拢20,000 鈥 customers can earn up to 拢298 per annum in interest, plus up to three per cent cashback on selected household bills, for a 拢5 monthly account fee. The 1|2|3 Lite Current Account offers the same cashback and no credit interest for a 拢1 monthly fee (see eligibility in editors鈥 notes).
1|2|3 and 1|2|3 Lite Current Accounts pay cashback on household direct debits
- 1% cashback on water, council tax and Santander mortgages
- 2% cashback on electricity, gas and Santander home insurance premiums
- 3% on mobile, home phone, broadband and paid-for TV packages
The account can be opened online at santander.co.uk, by telephone on 0800 707 6692 or in any Santander branch. 1|2|3 and 1|2|3 Lite Current Account customers also have exclusive access to 1|2|3 World, which offers a range of preferential rates and special deals.
- ENDS -
The information contained in our press releases is intended solely for journalists and should not be used by consumers to make financial decisions.
Notes to Editors
- Household bills include Council Tax, TV, phone, broadband, gas, water and electricity. Rent and mortgage payments were excluded from the analysis.
- Figures based on the ONS Family Spending Report 2016, published 16 February 2017, and the ONS Annual Survey of Hours and Earnings 2016, published 26 October 2016.
- Inflation is reported as a year-on-year percentage change as taken from the Retail Price Index. As such, the percentage increase between 2006 and 2016 is calculated by adding up the annual percentage changes over this timeframe instead of the standard percentage change calculation used for wage and bill inflation (i.e. (鈥2016 data鈥 鈥 鈥2006 data鈥) / 鈥2006 data鈥). Annual inflation data courtesy of the
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Year Retail Price Index year-on-year percentage change 2006 3.2% 2007 4.3% 2008 4.0% 2009 -0.5% 2010 4.6% 2011 5.2% 2012 3.2% 2013 3.0% 2014 2.4% 2015 1.0% 2016 1.8% Inflation, 2006-2016 32.2% - Assuming average household bills over a period of 63 years from the age of 18 to 81 (the estimated life expectancy in the UK). All figures based on an anticipated annual inflation rate of 2.7% starting in 2016, which is the average annual inflation rate for the past 20 years (1997-2016) as calculated on the Bank of England鈥檚 inflation calculator.
Santander 1|2|3 Current Accounts
1|2|3 Current Account: For interest and cashback, pay in 拢500 a month and set up two active Direct Debits. A 拢5 monthly fee applies.
1|2|3 Lite Current Account: For cashback, pay in 拢500 a month, set up two active Direct Debits and log on to Online or Mobile Banking at least once every three months. A 拢1 monthly fee applies.
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