"Awful April" and the UK Cost of Living
Sunday 6th April is the start of a new financial year, here in the UK. According to data from numerous financial and economic institutions, an estimated million plus households will be facing annual increases of £400 to £500 as the proverbial “cost of living” goes up. Everything from Council Tax to Mobile and Broadband costs are being increased. Future cost hikes are expected in our energy and water utilities. As bills start going up across the country today, average wages remain stagnant. Middle-income and poorer households have been worst hit by this wage related issue. Hence the tabloid press have labelled the start of the new financial year as “Awful April”. Hyperbole aside, this is a very real issue which due to its complex, global causes, doesn’t have a quick fix solution.
Here a some of the increases the UK public face:
The majority (88%) of households in England will face a maximum increase in council tax of 4.99% which adds an average of £109 to a typical band D bill. Due to some councils facing severe financial hardship Bradford, Newham, Birmingham, Somerset, plus Windsor and Maidenhead have been granted permission to raise council tax above the current 4.99% cap.
Average energy bills are expected to rise to £1849 annually. Energy regulator Ofgem has increased the price cap for the third time, resulting in an extra £9.25 per month. Fixed-rate deals will see no change in cost until their term expires.
Water bills are expected to rise by 26%, which is £123 annually. Last March, private water firms in England reported a £1.7 billion pre-tax profit. Yet the public still endure an expensive service, regular leaks and sewage discharges into the UK waterways and coastal areas.
As of April 1st, 2025, food inflation in the UK continues to rise, with food prices overall 2.4% higher than last March. This itself was up from 2.1% in February, according to the British Retail Consortium-NIQ shop price index.
There are also scheduled increases in the cost of UK vehicle tax, TV license, mobile and broadband services and many other consumer industries.
These factors combined with the prospects of a global trade war and other geopolitical problems, mean that the economic prospects for the next financial year are far from good. The dour economic outlook makes it increasingly difficult for the UK government to rebuild the country’s crumbling public services and hamper wider plans to grow the economy. As for the public, wage stagnation coupled with the freezing of income tax thresholds until April 2028, will mean that many households will struggle financially. Shortfalls in disposable income frequently leads to daily expenditure being paid for by credit card. As of April 2024, UK households held an average of £2,487 in credit card debt, with total outstanding credit card debt reaching £70.1 billion. This is a 7.02% increase year-over-year.
Wealth and poverty can be relative things. For example, does choosing not to get into debt to finance a family holiday make you poor or just financially prudent? Can you be poor with an annual salary over £100,000 a year? As ever in life, simple or binary answers tend to be spurious and inaccurate. Nuance, complexity and context are required to reach a greater understanding. However, there comes a point when the realities of increasing monthly costs upon a household budget is no longer debateable. I do not consider my own financial situation to be dire, however the recent increases in the cost of living, especially with regard to food inflation have been clearly noticed and felt. As it is unlikely that any major changes or assistance are going to be forthcoming from the state, I suspect many of us will be looking at our own personal budgets and determining what costs can be reduced in the months to come. “Awful April” may well become a much longer affliction.
