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April Fools’ Day kicks off with a shock to our finances that’s not funny – a massive ‘Billmageddon’ tax raid on our finances that will cost each household at least £1,000 extra a year.
Families are having their finances plundered with six major bill price hikes, including council tax, water and energy charges – all ramped up above the rate of inflation.
Hammering hard-working households already feeling down, Chancellor Rachel Reeves will make a £25billion raid on employers’ National Insurance rates on April 6, passing on the costs with lower wages and higher prices.
These hikes come at a time when families are already feeling the squeeze, with the cost of living rising at an uncomfortable 2.8 pc and tariff threats by US president Donald Trump expected to further hit high street prices.
But you do not have to take the bill hikes lying down. Follow our Money Mail action plan to fight back and survive this dreaded Billmaggedon – as we reveal the costs and tips to save money – today.
Gas and electricity bills are set to go up by £111 from April – to £1,849 a year for a typical household
Energy bills
Gas and electricity bills are set to go up by £111 from today – to £1,849 a year for a typical household.
This is because the industry regulator Ofgem is increasing the energy price cap by 6.4 pc for homes in England, Scotland and Wales.
Most households – 22 million – are on a variable-rate tariff, which is subject to the cap. That means that when the cap rises, so will their bills.
However, you can beat the rise by taking out a fixed-rate deal that locks in the cost of energy at a rate below the new price cap.
Households can still save more than £100 a year by opting for the cheapest fix on the market versus the April price cap, according to comparison website Uswitch.
The good news is you have not left it too late to get a fixed rate deal that beats the new £1,849 price cap – though you may save less money than if you fixed before April.
Outfox the Market has an April 2025 fixed-rate deal for those willing to be locked in for 12 months at £1,605 – saving you £244 a year on the new fixed rate cap rate.
The catch is that if you decide to quit this dual-fuel deal early you must pay a penalty of £25 for each of the gas and electricity services that are being used.
So Energy has a So Buckthorn two-year deal with a typical annual bill charge of £1,625 – saving you £224 over a year on the new price cap. It comes with a heftier early exit penalty of £75 for each fuel if you leave within 24 months.
Price caps are set every three months and there is always a chance that it will fall later in the year to a level below the current fixed rate offer.
But although some energy experts are predicting a very small fall by the summer, it is unlikely to outweigh the savings you would make by fixing now.
Even if the price cap falls to £1,756 in July, as predicted by experts, you could save more than £100 with the best deals.
The best way to find a new deal is on a comparison website such as Uswitch, MoneySuperMarket or Compare The Market. Tap in the details of where you live, and your energy usage – you can find this by taking a meter reading. They show the best electricity and gas deals available and will complete the switch within five days.
You could also cut bills in other ways. As much as £500 a year of your heating bill disappears through the roof, windows and walls, according to expert organisation the Energy Saving Trust.
By installing loft insulation in the attic, you could knock £140 off yearly bills. A five-metre length of loft insulation from DIY store Wickes costs £25.
Also go around the house and turn off electric items that are left on standby overnight, such as TV sets, as this uses up to £100 a year in electricity.
You can hopefully turn the central heating off by next month as the weather warms up.
But even just turning the thermostat down will cut bills by up to 10 pc – more than £180 over the course of a year.
Typical price hike: £111
Potential savings: £500
Water bills
Households in England and Wales can expect water bills to go up by an average of at least £10 a month from this April.
Industry body Water UK says bills are expected to rise on average by 26 pc to £603 from £480.
Homes in some areas face even bigger rises. Among the worst hit will be those signed up to Southern Water.
Some 4.7 million customers living in Kent, Sussex and Hampshire will see bills rise by as much as 47 pc, with yearly costs jumping from £478 to £703.
Households in England and Wales can expect water bills to go up by an average of at least £10 a month from the start of April
Unfortunately, you can’t shop around to get a better deal as just one water company will serve your area. However, there are ways to limit the financial pain. Most water companies have a social tariff for customers who are struggling or who receive certain benefits – ask yours if you think you might be eligible.
Some households could also save costs by installing a water meter. Those who switch typically save up to £100 a year.
With a meter you are charged for water you use, rather than a set cost based on the value of your property. That means you have an incentive to use less. As a rule of thumb, if there are more bedrooms in a home than people, a meter could save you money.
The roof of a house can collect 50,000 litres of water in a year, so a good way to save money is to install a 50-gallon water butt costing £40 from a DIY store which can be used to water the garden rather than turning on a hosepipe.
Cut down on baths and have showers instead. A bath typically uses 100 litres of water while taking a four-minute shower with a £20 water-saving shower head uses 32 litres of water.
A washing machine requires up to 150 litres of water per wash. But if you wash using the ‘eco-mode’ setting it can use just 50 litres.
Typical price hike: £123
Potential savings: £100
Council tax
Council tax bills are rising by as much as 15 pc from today. The average council tax for a ‘Band D’ property in England was previously £2,130.
Local authorities with responsibility for social care are raising council tax bills by 4.99 pc – to £2,236 on average.
Smaller English councils are only allowed to raise bills by 2.99 pc, while in Wales rates may rise by as much as 15 per cent.
Council tax rates in Scotland can go up by 10 pc following several years of limited rises.
If you live alone, have a live-in carer or share a property with a student or someone with a severe mental illness, you may be entitled to a 25 pc council tax discount.
For someone living in a Band B property, this would wipe £559 off the average annual bill.
If you think you are in the wrong tax band, you may be able to save hundreds of pounds by challenging it.
The Valuation Office Agency (VOA) manages council tax bands. The system was introduced in 1991 and is based on property values at that time.
A Band A is for properties valued at under £40,000 more than 30 years ago, while Band H is for those worth £320,000.
The higher the band, the more tax you pay. Ask neighbours in a similar property what band they are in. If they are in a lower band, it might be worth challenging yours.
Check online tool gov.uk/council-tax-bands for guidance. In England and Wales visit gov.uk/challenge-council-tax-band, email ctinbox@voa.gov.uk or call 03000 501 501 if you wish to appeal. In Scotland visit saa.gov.uk/council-tax/council-tax-bands.
Be warned, though – if you appeal and the VOA decides that you are in the correct band and your neighbour is not, it could result in your neighbour being moved into a more-expensive band.
Typical price hike: £106
Potential savings: £200
Car tax
Petrol and diesel cars that are under a year old face a tax hike. Motorists who previously paid £220 for a typical new car that emits 120 grams of carbon dioxide per kilometre will now pay £440 from this month.
Vehicles registered between March 2001 and the end of March 2017 will also now have to pay more road tax, typically between an extra £5 and £25 a year.
Electric vehicles (EVs) registered between April 2017 and the end of March 2025 are no longer exempt from paying car tax – known as Vehicle Excise Duty – from next month. Instead, the standard rate of £195 will apply.
New EVs will have to pay only £10 for the first year before switching on to the standard rate – but if they cost more than £40,000 there is an extra ‘luxury car tax’ of £425 to be paid annually from the second to sixth year.
Motorists who previously paid £220 for a typical new car that emits 120 grams of carbon dioxide per kilometre will now pay £440
If you use the vehicle for commuting it might be possible to car share with others making the same journey to cut costs. Websites such as BlaBlaCar and Liftshare can help you find people.
Free app PetrolPrices shows you fuel prices at filling stations – and reckons it can save you £240 if willing to shop around.
Make sure that you do not wipe out potential savings by driving further afield in search of cheaper fuel.
The difference between paying at a motorway service station or getting cheap petrol at a supermarket can be as much as 20p a litre, according to motoring organisation RAC. For a typical 50-litre car this could save £10 for a single fill-up.
Typical price hike: £220
Potential savings: £240
Phone/internet/TV
Those signed up to BT or sister brand EE for phone and broadband face a 6.4 pc hike in their bills from today if they began their contract before April last year.
If you signed the contract after this date, expect a £3-a-month rise added to your bills.
Virgin Media broadband customers face a 7.5 pc rise if they signed their latest deal before January 9 this year. Those who took out their contract after this can expect a £3.50-a-month rise.
If you are out of contract, you can use comparison websites such as Uswitch, Compare The Market and Confused to see if you can get a better price.
Call your supplier to see if they can beat the offer or provide a better price if you are threatening to leave. If you never use the landline and rely on a mobile phone for all your calls, then cutting this option typically knocks £5 a month off charges.
The BBC is raising the TV licence fee it charges by £5 to a new high of £174.50 from this April.
Unfortunately, you cannot watch live TV on any channel – not just BBC, but others including ITV, without a licence. You also cannot use its catch-up service iPlayer.
A more practical option may be to ditch one of the streaming services you use, such as £12.99 a month for Netflix without adverts, £8.99 a month for an Amazon Prime Video service, or £8.99 a month for a standard Disney+ package.
Typical price hike: £39
Potential savings: £216+4
Stamp duty
If buying a home in England or Northern Ireland, you have not had to pay stamp duty tax on its value up to £250,000.
But from today this allowance is cut in half to £125,000 and you pay Stamp Duty Land Tax (SDLT) starting at a rate of 2 pc on the value of the property – rising to 5 pc for between £250,000 and £925,000, then 10 pc up to £1.5million. Anything above is taxed at 12 pc.
A typical semi-detached home selling for £355,000 that previously attracted a stamp duty tax of £5,238 will now be charged a stamp duty of £7,738.
For first-time buyers the threshold for not having to pay SDLT has been slashed from £425,000 down to £300,000.
Typical price hike: £2,500
Potential savings: None
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