Latest news with #householdbills
Daily Mail
24-05-2025
- Business
- Daily Mail
Slash your household bills by investing in the very firms that keep on hiking prices
The cost of living has surged again, driven up by a sharp rise in household bills last month. So called 'Awful April' brought a barrage of bill hikes on everything from energy and water to broadband bills and car tax. Council tax bills increased £109 on average, energy bills by £111, water bills by £123, and £50 was added to the typical annual phone and broadband bill. That drove inflation up to 3.5 per cent, official figures confirmed last week. But for investors willing to do their homework, there is an innovative way to get help with the rising cost of all the essentials. Investing in the companies that are raising your bills could be an effective way to earn an income large enough to cover what they charge you. Dan Coatsworth, from the investment platform AJ Bell, says: 'Most of the companies on the stock market charging us these bills pay generous dividends – you could buy their shares and use the income payments to settle up. In doing so, you are effectively handing them back their own cash.' Of course, it may not make sense to buy shares in companies just because you are their customer. But there can be opportunities among firms that provide these basic household services, such as energy and insurance. Here, experts suggest their top picks in each category – and how much you would need to invest to cover your bills, although of course you could buy less to cover part of them. Energy bills The energy price cap, which dictates the maximum households can be charged for each unit of gas and electricity, increased by 6.4 per cent in April, bringing the typical annual bill to £1,849, although it will fall again by £129 a year in July. Centrica, which owns British Gas, yields 3 per cent, and SSE, which supplies about five million British households, 3.6 per cent. You would need to invest about £50,000 in the latter to generate a large enough dividend to pay your annual energy bill. Charles Luke, manager of the Murray Income investment trust, points to National Grid as one reliable dividend payer in the energy space. 'It is a very solid business and benefits from the fact that we need to invest in our infrastructure as part of the energy transition,' he says. Shares currently yield 4.5 per cent. Mr Coatsworth suggests looking beyond the major providers to Telecom Plus, which owns the Utility Warehouse brand and yields a healthy 4.8 per cent. An investment of about £38,500 would generate enough income to cover the bills. Insurance A typical car insurance policy now costs £589, and for home buildings and contents insurance you can expect to pay £393, according to the Association of British Insurers. That's a combined annual insurance bill of £982 on average. At 2.4 per cent, Direct Line's dividend yield is nothing to write home about. Admiral, which insures about 5.7 million cars in the UK, looks more interesting, with a yield of about 4.4 per cent. Aviva yields a chunky 6.5 per cent. An investment of £9,100 would produce a dividend large enough to cover the average car insurance premium. Meanwhile, a £6,250 investment in Mony Group, which owns the comparison site MoneySuperMarket and yields 6.3 per cent, could generate enough to cover the home insurance. Phone and broadband Mid-contract price hikes meant some customers saw their phone and broadband bills increase by as much as 7.5 per cent in April. Vodafone shares currently yield a hefty 8 per cent, but such a high yield raises questions about sustainability. The yield is a company's dividend expressed as a percentage of its share price, so when the share price falls, the yield rises. This might look attractive but isn't necessarily. Vodafone shares are down 9.6 per cent over the past year, and down 42 per cent over five years. Remember in general that high yields are not the only measure to look out for – you'll need to do your research to make sure you understand the business. A company may look like it's offering a great deal, but have a systemic problem that means future earnings could be lower than expected. Simon Gergel, manager of the Merchants investment trust, says: 'Focusing specifically on yield can be quite dangerous, and some of the highest yielding stocks can be value traps.' One helpful indicator to give you an idea of whether the annual payout could be cut in future is the dividend cover ratio. This indicates how many times over a company can afford to pay its dividend. Anything below one suggests a firm is borrowing to fund its payout, which can be a sign of trouble. Ben Kumar, from the wealth manager 7IM, adds: 'Remember also that dividends are not guaranteed. Companies can, and do, cut them. Shares in the telecoms giant BT yield 5 per cent. An £11,000 investment could bring in enough to cover the typical £550 annual cost of phone and broadband. Water Water bills leapt by 26 per cent in April, bringing the average annual cost to £603. Getting a water meter can help reduce that, particularly if there are fewer people in your property than it has bedrooms. Alternatively, you could make the water providers pay for you. Severn Trent, which serves about 4.6 million UK households, yields an attractive 4.5 per cent. Dan Coatsworth prefers United Utilities, which yields a fraction more at 4.6 per cent. A £13,100 investment could produce enough income to do the job. Mr Kumar says: 'While dividends tend to keep pace with broad inflation over time, that is different to the specific inflation on your bills. 'Overall inflation is 3.5 per cent right now, but water bills just went up 26 per cent – so you might have to invest considerably more in the future to ensure your dividend income keeps pace with increases.' Spread your risk Cherry-picking individual stocks can be risky, so you might feel more comfortable letting a professional do the work. Income funds can provide a reliable dividend while spreading their risk across dozens of different stocks. Murray Income Trust is a so-called Dividend Hero – a fund that has increased its dividend for at least 20 consecutive years. Its top holdings include National Grid, HSBC, and BP, which is good news for those worried about petrol prices. It yields 4.55 per cent. Merchants Trust, which has increased its dividend for 43 consecutive years, yields 5.4 per cent and its top holdings include Lloyds Banking Group and SSE. How it works When you buy shares in a company you get a vote at the firm's annual general meeting and you share in its profits. Your money could grow if the company share price rises – or your investment could fall if the share price goes down. But on top of this when a business is profitable it rewards shareholders with a payout called a dividend. The amount is expressed as a percentage. So if you invest £1,000 in a company and it pays a 5 per cent dividend, you'll get £50. When you get a dividend you can choose either to reinvest it or take the money as cash.
Yahoo
23-05-2025
- Business
- Yahoo
Ofgem confirms energy bills are set to fall by £129 under latest price cap
Ofgem has confirmed household energy bills will fall by around 7 per cent from July in its latest price cap update. The regulator said on Friday that the typical bill is expected to fall by £129 to £1,720 per year when its new price cap comes into force. The price cap, which sets the limit on how much firms can charge customers per unit of energy, is currently at around £1,849 for a typical household after three consecutive increases in bills. It comes after US president Donald Trump's aggressive tariff plans led to a significant slump in gas and oil prices. However, the drop is slightly less than the previously forecast 9 per cent fall following an easing of trade tensions in recent weeks. News of a fall in energy costs will come as a relief for households, who suffered through an "awful April" of bill rises, including Ofgem's last 6.4 per cent price cap increase. Under-pressure households have also been hit with the biggest increase to water bills since at least February 1988, alongside steep increases across bills for council tax, mobile and broadband tariffs, as well as road tax. Bill rises have led to Consumer Prices Index (CPI) inflation jumping to 3.5 per cent in April, up from 2.6 per cent in March and the highest since January 2024. On Monday, Craig Lowrey, principal consultant at Cornwall Insight, said: "The fall in the price cap is a welcome development and will bring much-needed breathing space for households after a prolonged period of high energy costs. "It's a step in the right direction, but it should be taken in context. "Prices are falling, but not by enough for the numerous households struggling under the weight of a cost-of-living crisis, and bills remain well above the levels seen at the start of the decade. "As such, there remains a risk that energy will remain unaffordable for many."
Reuters
23-05-2025
- Business
- Reuters
UK's Ofgem lowers price cap by 7%, says energy bills would hit $2,313
May 23 (Reuters) - British energy regulator Ofgem on Friday lowered its price cap on household energy bills from July by 7% to an annual level of 1,720 pounds ($2,313.92) for a typical dual-fuel household. ($1 = 0.7433 pounds)
Yahoo
23-05-2025
- Business
- Yahoo
Typical energy bill in Great Britain to fall 7% to £1,720 a year from July
Energy costs will fall for millions of British households this summer after the industry watchdog cut the price cap for a typical annual dual-fuel bill by 7% to £1,720. The energy regulator for Great Britain, Ofgem, said the cap on gas and electricity charges would fall from July by the equivalent of £129 a year for the average home after a sharp slump in Europe's gas market prices. Despite the drop, which follows three consecutive quarterly increases, the typical household will still pay about £600 a year more on their annual bill than before Russia's invasion of Ukraine three years ago. About 9m households that buy their energy through variable tariffs will see an immediate impact on their bills as the cap takes effect in July. But bill payers could still face higher bills if they use more than the typical amount of energy. This is because the cap, which is recalculated every three months, limits the rate energy suppliers can charge customers for each unit of gas and electricity – not the total bill. Ofgem was able to lower the cap after a slump in gas market prices across Europe, which has helped to cut costs for energy suppliers. The benchmark price for European gas tumbled from highs of almost €58 (£49) per megawatt-hour (MWh) in February to just over €31/MWh last month, while the UK gas market price fell from 138p per therm to about 78p/th. Cheaper gas means lower costs for household heating, but it also lowers the cost of electricity in the UK because a large proportion of power is generated in gas power plants. The new price cap is likely to reignite the debate over the affordability of the UK's energy. A record proportion of British households were unable to pay their energy bills by direct debit last month because there was not enough money in their bank accounts, according to official government data. More than 2.7% of direct debit payments for gas and electricity defaulted in April because of insufficient funds, the latest figures published by the Office for National Statistics have revealed. The rising energy default figures are expected to lead to higher overall energy debt and arrears, which reached a record £3.8bn at the end of September last year. This is more than double the debt shouldered by households at the start of 2022. Sign in to access your portfolio
The Guardian
23-05-2025
- Business
- The Guardian
Latest energy price cap expected to cut bills across Great Britain
Update: Date: 2025-05-23T05:28:34.000Z Title: Ofgem to set latest energy price cap for household bills Content: Good morning. British households may learn today that energy bills will fall this summer, for the first time in a year. Energy regulator Ofgem is poised to announce its latest price cap on bills in England, Scotland and Wales this morning, at 7am, and industry analysts predict it will be cut. The cap limits how much firms can charge customers for units of gas and electricity, and is set every quarter. This time, experts are forecasting the cap will be cut for the first time in a year, due to recent falls in the wholesale gas and oil prices. That would lower the energy bills of millions of households across Britain in July-September. Earlier this week, consultancy Cornwall Insight predicted the cap will be cut by 7% – that would slash around £129 off the annual bill for a typical dual-fuel household this summer, from £1,849 under the current limits. However, it's important to note that the cap applies to the cost of a unit of energy – there's no cap on how large a bill a family can run up. And as Dr Craig Lowery, a consultant at Cornwall, pointed out on Monday, energy bills were still too high for many. 'Prices are falling, but not by enough for the numerous households struggling under the weight of a cost of living crisis, and bills remain well above the levels seen at the start of the decade.' 'The fall is also a clear reminder of just how volatile the energy market remains – if prices can go down, they can bounce back up, especially with the unsettled global economic and political landscape we are experiencing. This is not the moment for complacency.' 7am BST: Ofgem to announce latest energy price cap 7am BST: Retail sales report for Great Britain in April 9.30am BST: Latest estimate for how many UK young people are not in education, employment or training 3pm BST: US new home sales data
