In April 2025, UK households are facing a significant surge in living expenses, with monthly costs increasing by up to £128. This rise is largely driven by a combination of factors such as higher energy bills, council tax, water rates, and broadband charges.
As these costs mount, many wonder if government support is available to help manage these increases. This guide will explore everything you need to know about the financial assistance available, including the £90 cost of living payment and other support options.
What’s Causing the £128 Monthly Household Cost Increase?
The £128 increase in household costs is largely a result of several regulatory and market-driven factors:
1. Energy Bills
The Ofgem energy price cap has been adjusted, which has raised the average household’s annual energy bills by £111. This translates to roughly £9.25 more per month.
The increase is due to global fuel costs, necessary infrastructure maintenance, and rising operational costs of energy providers.
2. Water Bills
Water UK reports that water and sewerage charges have risen by £123 annually, which works out to about £10.25 per month for many households. The increase varies by location.
3. Council Tax
Across England and Wales, most councils are raising council tax by 5%. However, councils like Birmingham City Council have been allowed to implement a hike of up to 15.6%, potentially adding £6 to £15 to monthly bills.
4. Broadband and Mobile Tariffs
Telecom companies have imposed CPI+3.9% increases on broadband and mobile tariffs, leading to price hikes of £1.50 to £3.00 per month for the average household. Bundled services may experience higher price increases.
Support Available for Households
Despite the increase in living costs, the UK government is offering several forms of financial support to help households navigate the rise in expenses.
£90 Cost of Living Payment – Who’s Eligible?
To ease some of the financial burden, the Department for Work and Pensions (DWP) is providing a £90 cost of living payment in April 2025.
Eligibility:
You are eligible if you receive any of the following benefits:
- Universal Credit
- Pension Credit
- Income Support
- Income-based Jobseeker’s Allowance (JSA)
- Income-related Employment and Support Allowance (ESA)
- Child Tax Credit or Working Tax Credit (administered by HMRC)
How to Receive the Payment:
No application is needed. Eligible individuals will receive the payment automatically, typically with a reference of DWP COL or HMRC COLS.
Household Support Fund – Additional Assistance
The UK government has extended the Household Support Fund, with £742 million allocated to local councils between April 2025 and March 2026.
What the Fund Can Help With:
- Food and groceries
- Energy and water bills
- Clothing and household goods
- Housing costs (not covered by other benefits)
Local councils have the flexibility to distribute these funds in various ways, including:
- Vouchers
- Cash grants
- Direct payments to utility providers
Impact of the Price Increases on Different Groups
Pensioners
Retirees, especially those on fixed incomes, are highly susceptible to these cost increases. Pension Credit recipients qualify for both the £90 payment and additional energy discounts through the Winter Fuel Payment scheme.
Low-Income Workers
Those working in minimum-wage or part-time roles may not receive direct benefits but may be eligible for local council support, food banks, or charitable assistance.
Disabled Individuals
People receiving Disability Living Allowance (DLA), Personal Independence Payment (PIP), or Attendance Allowance may be able to access extra support, including prioritized access to the Household Support Fund.
Practical Tips to Reduce Your Monthly Costs
Here are a few strategies to help reduce your household expenses:
| Tip | Details |
|---|---|
| Conduct a Home Energy Audit | Small changes like switching to LED bulbs, insulating windows, and using draft stoppers could save up to £25/month. |
| Switch to a Cheaper Broadband Provider | Use Ofcom’s broadband comparison tool to find better deals. |
| Use Budgeting Apps | Apps like Money Dashboard or Emma can help track and reduce spending. |
| Check for Hidden Discounts | Always ask your council about potential discounts for single occupancy, disabilities, or students. |
Expert Insight
Dr. Amira Khan, an economist at the University of Manchester, explains:
“The April cost increases reflect long-term structural issues in utility and public service funding. While the government’s short-term relief is welcome, households must also prepare for further inflation-linked adjustments throughout 2025.”
Will the Situation Improve in the Coming Months?
While inflation seems to be stabilizing, experts predict that living costs will remain high throughout 2025. The Bank of England has not ruled out further interest rate hikes, which could affect mortgage and loan repayments.
The £128 monthly cost increase in April 2025 is a significant challenge for many UK households. However, government support through programs like the £90 cost of living payment and the Household Support Fund offers some relief.
By staying informed, budgeting effectively, and accessing available assistance, households can better manage these rising costs.
FAQs
Who is eligible for the £90 cost of living payment?
Individuals receiving Universal Credit, Pension Credit, Income Support, and similar means-tested benefits are eligible. The payment is automatically made to eligible recipients.
How can I access the Household Support Fund?
You can access the Household Support Fund through your local council. They offer various forms of support such as vouchers, cash grants, and direct utility payments.
What changes can I make at home to save money on my energy bills?
Consider simple changes like switching to energy-efficient LED bulbs, insulating windows, and using draft-proofing techniques to save on heating costs.