Energy, childcare and other bills set to rise in 2025
As the cost of our essentials continues to spiral, we look at five of the most painful hikes on the horizon – and how you can lower your bills.
Every time we think the cost-of-living squeeze is easing, another bill seems to creep higher.
From October’s energy hike to stubbornly high food prices, 2025 is proving to be another tough year for household budgets.
Here, we reveal some of the most prominent price hikes on the horizon – and explain what to do about them.
Energy bills inch higher: costs rise to £1,755
For almost every Brit, energy is one of the biggest drains on our wallets.
And sadly, it seems gas and electricity bills are back on the rise, with Ofgem confirming the October Price Cap will increase by 2%.
This move would push the typical annual dual-fuel bill to just over £1,755.
While this is nowhere near the huge jumps of recent years, it’s still another increase at a time when many households were hoping for some relief.
How to fight back
One of the fastest and easiest ways to reduce your energy costs is to switch to a cheaper tariff.
Several suppliers now offer fixed-rate deals that undercut the Energy Price Cap, which could save you a fortune and protect you against future hikes.
If you’ve not already switched to a new deal, take a few minutes to do so now
Food bills: 18-month high
If you’ve noticed your weekly grocery shop creeping higher, you’re not alone.
According to data from the British Retail Consortium, food price inflation has climbed to an 18-month high.
As such, everyday essentials including bread, milk and meat remain more expensive than they were a year ago, with supermarkets still dealing with higher wholesale costs.
Although there isn’t an awful lot any of us can do to combat food inflation, being vigilant for deals and discounts is always a good start – as well as checking out our weekly list of top bargains.
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“Free” childcare hours could cost parents more
When the Government came to power, it told parents that its expansion of free childcare hours would cut costs for most of us.
However, new research from the University of Bath suggests many may actually end up worse off as a result.
The problem lies in the mismatch between what the Government pays nurseries for each free place and what it actually costs providers to deliver the service.
In many parts of England, particularly for three and four-year-olds, the funding rate often falls short.
Nurseries may make up the difference by charging more for younger age groups or the extra hours that aren’t covered.
The study found nurseries in poorly funded areas raised prices far more quickly than those in better-supported regions.
In practice, this means that, while families will get more free hours on paper, the cost of the time they do still pay for could rise, eating into any savings.
Rents: up by 6.7%
As if that weren’t enough, renters are also facing more pain.
According to figures from the Office for National Statistics, average UK private rents jumped 6.7% in the year to June, hitting £1,399 a month.
London remains the most expensive region, with the typical tenant paying around £2,250, but the North East saw the sharpest annual increase at nearly 10%.
Agents across the country expect rents to keep climbing in the months ahead.
Even new build-to-rent developments in cities such as London and Manchester, designed to boost supply, have done little to bring prices down.
For millions of households who rent, it means housing costs are set to take up an even bigger share of their monthly income.
Water bills: up 21%
Sadly, energy isn’t the only utility set to rocket in the foreseeable future.
Ofwat, the water regulator, has forecast an average increase of 21% over five years, adding £94 in total, or £19 per year, to the typical bill.
However, several suppliers have proposed even more punishing rises.
How to fight back
If you are on a water meter, then there are things you can do to reduce your bills.
Simple measures such as taking a shower rather than a bath, turning off the tap when brushing your teeth and fixing leaky taps all make a difference.
Most water companies also offer gadgets to help you cut your water use.
Many are free too so be sure to check your supplier’s website.
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The bottom line
Energy, food, childcare, and housing are the pillars of most household budgets, and all are moving in the wrong direction.
Even policies designed to help, such as free childcare, risk backfiring without proper funding.
For families already thinly stretched, the months ahead will require even tighter budgeting and a close eye on where costs can be controlled
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