How much your bills will soar this year

Rising energy prices, rampant inflation and ill-timed tax hikes will hit you squarely in the wallet, writes Will Kirkman

Hard- pressed households will come under more pressure this year as a triple whammy of inflation, tax hikes and high energy prices add an average £2,922 to annual bills.

Wages have failed to keep pace with spiralling costs. Wage growth slowed to 4.2pc towards the end of 2021, resulting in the third real pay squeeze in a decade. Workers need a pay rise of 8.7pc just to keep up – and this is at the current inflation of 5.4pc. The Bank of England expects inflation to hit 7.25pc in April.

This comes as household bills are expected to rocket. Mortgage rates are rising, and are likely to rise further as the Bank Rate goes up. Council tax is

expected to increase, taking the annual bill for an average band D property to almost £2,000. Millions of households will face an enormous squeeze on their finances after the energy price cap rises in April, adding almost £700 to bills.

At the same time, motorists are being hammered by sky-high petrol prices. The RAC has accused petrol retailers of failing to pass on wholesale price cuts, costing drivers an extra £5m a day.

A million parents will also lose their child benefit payments this year, according to the Institute for Fiscal Studies, a think tank, as the ceiling for those who can claim the full payout has remained frozen at £50,000.

The squeeze has already forced households to raid their savings. Savings levels have fallen back to pre-pandemic levels and borrowing has increased, according to Bank of England data.

This means many households will be less prepared for spiralling bills in April when tax changes take effect and energy prices rise.

Telegraph Money has done the maths to find out the extra cost increases you can expect to face this year. Of course, these are just averages and are based on typical cases, salaries and scenarios; for many families, the real price rises will be much higher.