What does this year hold for your bills – what's going up and what's going down?

Mortgages, rail fares, council tax, energy, fuel and water prices – which will rise or fall in 2020? Moneywise looks at how to cut your expenses

An unexpected bill increase can make you feel as though you have little control over your finances.

The key to taking back control of your budget is understanding how they work and where to make savings.

From council tax to rail fares, we reveal whether your bills are likely to rise or fall in 2020 and arm you with tips to cut the cost of your expenses.

Council tax

Status: going up

Amount: up to £70

Government ministers have granted local authorities the power to increase council tax by 2% this year. Areas with adult social-care responsibilities will be able to raise rates by up to 4%.Council tax bills in the UK could go up by as much as 4% from April, adding an extra £70 to your bill, depending on where you live.

The average band-D council tax home in England is currently charged £1,750 and a 4% rise would bring this total to £1,820 – up £70.

How to cut your council tax bill

Your council tax bill is determined by several factors such as your property’s size, layout, location and character, so it’s not an easy bill to cut down. There are a few ways to make sure you are paying the right amount of council tax, however, and potentially claim a refund if you’ve paid too much.

Check you’re in the right band

Around 400,000 homes in England and Scotland could be overpaying on their council tax bill because they’re in the wrong band.

If you think your council tax band is incorrect, you’ll need to contact the Valuation Office Agency (VOA) and ask for your property to be revalued.

A successful council tax challenge could mean that you save thousands of pounds on your bill. It’s important to remember that asking for a revaluation could result in your property moving up a council tax band, which could increase the amount you have to pay.

Check if you’re exempt from council tax

If you’re a full-time student, you don’t need to pay council tax at all.

Those diagnosed as being severely mentally impaired (SMI) are also exempt from council tax in England, Scotland and Wales.

Cut your bill by 25% if you live alone

If you live alone, with a student or someone diagnosed as SMI, and you reside in England, Scotland or Wales, you may be eligible for a single person’s discount.

This means that your council tax bill will be cut by 25%.

Rail fares

Status: going up

Amount: 2.7%

How to cut the cost of rail faresRail fares have gone up by 2.7% on average this year meaning that
many commuters face an increase of more than £100 for their annual season tickets.

There are a few ways to cut the cost. However, if you commute and have little choice about when you travel or the route you take, there may be little you can do about the increase.

Get a Railcard

Railcards allow you to get a discount on your train tickets and could save you hundreds of pounds a year.

A one-year Railcard costs anywhere between £20 and £30, while a three-year Railcard is priced between £54 and £70. Check out the Railcard website to see which one might work best for you.

Book in advance

The earlier you book a train, the cheaper your ticket is likely to be.

Travel off-peak

Where possible, travelling during off-peak times can also cut the cost of your trip.

Energy

Status: down

Amount: £75 in 2019

The energy price cap was introduced by the government in January 2019 to limit the amount of money that suppliers can charge per unit of energy to make sure customers pay a fair price.

In April 2019 many suppliers, including the ‘big six’ energy companies, increased their prices
after the government increased the price cap.

Following a review in August 2019, the cap was lowered, and energy providers have since cut the cost
of bills.

Recent figures have shown that the big six energy suppliers dropped prices by 6% for their standard variable and prepaid customers in October 2019.

This meant that the average energy bill fell by around £75 a year.

The energy price cap will be reviewed again in February 2020. If it’s increased, energy suppliers are likely to raise their prices.

How to cut your energy bill

There are a couple of ways to cut the cost of your energy.

Switch energy provider

You could save around £290 by switching your energy provider, according to the latest government estimates. 

Price comparison websites are a great way to search through hundreds of deals quickly and easily. 

Once you have a shortlist of companies you’re interested in, have a look at their reputation and provision of customer service.

See if you’re eligible for a discount

The Warm Home Discount and Winter Fuel Payment are grants designed to help older people with their energy bills during the winter months.

If you’re in receipt of benefits, your home may qualify for the Cold Weather Payment, which is designed to help pay for extra heating costs during periods of very cold weather. 

Some households will have one or more of these grants paid automatically, but if you think you might be eligible for them, go to www.gov.uk/cold-weather-payment to check.

Petrol

Status: going up

Amount: 2p per litre

The cost of petrol rose slightly in December 2019, ending a four-month run of falling prices.

Petrol rose 0.24p per litre to 126.11p, according to recent data from the RAC, a direct result of a surge in world oil prices that month.

The cost of filling up a 55-litre family car is now £69.36, up 13p on November. For diesel the price stands at £71.84, up 41p.

Experts warn that the cost of fuel could rise again as a result of the current Gulf crisis.

Simon Williams, fuel spokesperson at the RAC says: “Increasing tension between Washington and Tehran will cause the oil price to go up as traders worry about availability of supply.” Williams points out that this could spell bad news for drivers in the UK as the price of oil was already forecast to rise due to the cooling of the US’s 17-month long trade war with China, which led to an increase in demand.

He continues: “As things stand, it looks like at least 2p a litre will be added to the price of both petrol and diesel in the next two weeks.

“If the current situation in the Middle East was to escalate, however, drivers could be looking at far greater increases at UK forecourts.”

How to cut your petrol bill

Play the supermarkets

The big supermarket chains often battle it out during the year to be the cheapest at the pump. So check your local supermarket filling stations to see which might offer you the best deal.

Check for loyalty discounts

Most supermarkets and other fuel retailers offer loyalty card schemes that allow you to earn points. These can often be used to cut the cost of your general shop or fuel bill.

Earn cashback

Some credit card companies allow you to earn cashback when you buy petrol. Building up a cashback sum could help you offset the cost of future fuel purchases.

Water

Status: going down

Amount: £50

Your water bill could fall by around £50 over the next five years.

In a recent price review for 2020-2025 the Office of Water Services (Ofwat) announced a number of changes water companies in England and Wales have to make.

The regulator has ordered water suppliers to invest £51 billion in improving services, which includes cutting water leakage by 16% over the next five years.

How to cut your water bill

Unlike other utilities such as energy, you don’t have any choice over who your water supplier is, but there are a couple of ways to cut the cost of your bill.

Get a water meter

For certain homes, switching to a water meter could save you hundreds of pounds.

As a rule of thumb, a water meter could help you cut the cost of your bill if there are more bedrooms than people in your home. Larger households may not benefit as much from a meter as their water consumption is likely to be higher.

Water meters are fitted for free everywhere, except Scotland, and you have up to a year to switch back to an unmetered water bill if you find that you’re not saving any money.

Try water-saving gadgets

Homes in England and Wales can get hold of free water-saving gadgets to help cut the cost of their bill.

Thames Water and Save Water Save Money both offer free devices including shower heads that help regulate water usage and tap inserts to help regulate water flow.

Visit their websites to register for your free devices.

Home and Car Insurance

Status: variable

Amount: variable

Home insurance is at a record low of £127 a year, according to the Association of British Insurers (ABI).

Car insurance premiums fell by an average of £3 in the third quarter of 2019, compared to the same period the year before.

Both the home insurance and car insurance markets remain competitive, meaning that providers are incentivised to offer the best deals.

Drivers could see an increase in their premiums during the year owing to rising cost pressures.

Mark Shepard, assistant director and head of general insurance policy at the ABI, told Moneywise: “For motor insurance, cost pressures from the government’s changes to the personal injury discount rate, coupled with rising vehicle repair costs associated with advanced vehicle technology, will continue to put the squeeze
on premiums.” 

How to cut the cost of your insurance

Shop around

Finding the right insurance deal can seem overwhelming with so many deals available, but price comparison sites are a great way to start.

Consider raising your excess

Most insurance policies require you to pay the first portion of any claim, known as the excess. The lower the excess, the more expensive the policy.

If you think you would be able to stump up for a higher excess should you need to make a claim, request one when you take out your policy.

Bank charges

Status: going down

Amount: variable

Using an overdraft could become cheaper for certain customers in 2020.

From 6 April this year, new changes come into force which ban banks and building societies from charging higher rates for unarranged overdrafts than they do for arranged overdrafts.

Lenders will also be banned from charging fixed fees on overdrafts.

Several banks have already introduced the single interest rate, including Nationwide, HSBC, first direct, M&S Bank, RBS and NatWest, Monzo and Starling Bank. The rates announced so far vary between 15% and 39.9%.

How to cut your overdraft fees

Shop around

Some banks may offer fee-free overdrafts.

Nationwide, for example, offers new customers of its FlexDirect account a 0% fee-free overdraft for the first 12 months. If you’re looking for a longer-term overdraft solution, Starling Bank currently offers the cheapest single interest rate fee of 15% for qualifying customers.

Shift your overdraft to a 0% credit card

If you have a bigger overdraft it might be worth considering a specialist money transfer credit card to allow you to cut the cost of your repayments.

Tesco Bank offers a 0% interest Money Transfer credit card for up to 28 months. You will have to pay a one-off fee of 3.94% to have your overdraft transferred over.

Mortgages

Amount: variable

Status: going down

Mortgage borrowers in 2019 benefited from low rates across the board due to fierce competition between lenders.

Two-year fixed mortgage rates were at their lowest, falling to an average of 2.59% in November, compared to 2.69% in January the same year.

Five-year fixed rate mortgages had a similar story, with average rates falling from 3.37% in January to 2.75% in November.

How to cut your mortgage costs

Consider remortgaging

If the fixed term period of your mortgage is coming to an end, it’s worth remortgaging now to take advantage of the low rates. 

Overpay your mortgage

Overpaying your mortgage where possible could help you to clear your debt faster.

It’s important to check whether your lender will allow you to make overpayments before doing so.