Bills and tax calculator reveal rising cost of living for you from April 2022

Families in Leeds and across the country will brace for financial hardship over the coming months as the cost of living rises at its fastest rate in decades.

Many bills such as phone bills, clothing costs and used cars are also expected to increase.

The Office for National Statistics (ONS) recently revealed that consumer price inflation – a measure of the rate of increase in the price of goods and services – hit 5.4% in December, its highest level since 1992.

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And household budgets are expected to be further tightened this year with price increases expected in various sectors of the economy.

Use this cost of living calculator to see how much worse your situation could be per month.

Just enter how much you’re paying now and see how much your bills could go up this year.

Energy bills

Soaring wholesale gas and electricity prices have driven many energy providers out of business in recent months.

This is expected to hit consumers in April when a price cap increase – which limits how much can be charged per unit of gas and electricity – takes effect.

Regulator Ofgem is expected to announce the latest changes in February, but analysts expect household energy bills to rise by around 50% for customers on standard variable and default tariffs.

This could push the average household energy bill from £1,277 a year to over £1,900, or around £50 extra per month.

Mortgage rates

In February, the Bank of England is expected to announce that it will raise its main interest rate from 0.25% to 0.5% in order to combat rising inflation.

Variable rate mortgages are likely to reflect the 0.25 percentage point hike, meaning someone borrowing £140,000 over 20 years at a standard variable rate of around 3% could see their monthly payments rise almost £20.

Most mortgages are fixed rate, although people who agree to such transactions may be affected by rising bank rates when they expire.

national insurance

Last year the government said it would raise National Insurance (NI) contributions to shore up the finances of a severely overstretched NHS and social care sector.

From April, the NI rate for employees is set to rise from 12% to 13.25% on earnings of £9,880 to £50,270 a year, and from 2% to 3.25% on anything is won beyond.

This would see the NI contributions of someone earning £30,000 increase by around £18 a month.

For the self-employed, the rate would increase from 9% to 10.25%, and from 2% to 3.25% respectively at equivalent profit levels. Additional weekly payments on any profit over £6,725 will also increase from £3.05 to £3.15.

Rail fares

Just as millions of workers are expected to rejoin their daily commutes on their way back to the office, rail fares are also expected to rise.

Ministers announced last year that fares would rise by 3.8% in March, and although this applies to ‘regulated’ fares in England such as season tickets and intercity round trips, similar price increases are expected elsewhere.

Peak and off-peak Scottish regulated prices have increased by the same amount this month.

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Housing tax

Chancellor Rishi Sunak revealed in his October budget that local authorities in England could raise council tax by up to 3% without a referendum in April.

Leeds City Council recently announced an increase in council tax of £45 a year.

Many are expected to increase it by the maximum amount after losing valuable income due to the Covid-19 pandemic. Similar size increases are expected in Scotland and Wales.

A 3% increase would add nearly £5 a month to the average Band D council tax bill in England, which was £1,898 a year in 2021-22.

food bills

Consumer price inflation for food and non-alcoholic beverages rose 4.2% on the year to December, and some experts predict grocery bills could rise further in the coming months.

A dad with a full-time job was once forced to rely on food banks as his household bills doubled.

It’s impossible to know how prices will change this year, but assuming they continue to rise at the same rate, buyers could feel the pinch even more by the end of 2022.

The UK is in an energy crisis following soaring gas prices in recent weeks.

Many energy suppliers have gone out of business, sparking food shortage warnings in UK supermarkets.

Households are warned that anyone who buys fixed, cheap energy deals could face a huge price hike, even on the cheapest tariffs. To avoid a possible increase in the price of energy bills, customers can:

  • Maintain the price cap for six months as prices could potentially fall if the energy market stabilizes.
  • Upgrade to the cheapest one- or two-year fixed contract, but you’ll need to act fast – see here for switching.

Here are some of the comparison sites suggested by Ofgem:

You can also try Take care of my bills and Confused.com.

How the calculator works

  1. Energy bills: assumes a 50% increase in default tariff bills due to higher price caps, in line with market forecasts.

  2. Mortgage rates: Assumes a 0.25 percentage point increase in a standard variable mortgage rate payment, in line with the Bank of England’s forecasted base rate hike from 0.25% to 0.5%.

  3. National Insurance: based on a rate increase for employees of 12% to 13.25% on earnings of £9,880 to £50,270 a year, and 2% to 3.25% on anything over that amount . For the self-employed, the rate will drop from 9% to 10.25% and 2% to 3.25% respectively on equivalent profits, plus new weekly payments of £3.15 on profits over £6,725, up from Previously £3.05.

  4. Rail Fares: Assumes that the planned 3.8% rise in regulated fares in England in March will apply across the rail network.

  5. Council tax: Assumes a 3% increase in council tax bills.

  6. Food bills: Consumer price inflation for food and non-alcoholic beverages rose 4.2% year on year in December. The magnitude of future increases is very difficult to predict. This shows how purchase bills would increase over the course of 2022, assuming the same rate of increase.

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Esther L. Steinbach