The annual cost of household bills is predicted to drop by £350 compared to the same time last year, research has revealed.

The study analysed the cost of energy, water, home insurance, car insurance and council tax.

It revealed that the combined cost of these household bills is set to fall by six per cent, compared to this same time 12 months ago.

The decline is fuelled primarily by a drop in the cost of energy, with Ofgem’s latest price cap hitting its lowest mark in more than two years.

The research, from Compare the Market, found that households can expect to save £810 on energy compared to the same time last year.

The new energy price cap stands at £1,690 per year for the energy used by an average household, whereas the price cap in April 2023 was at £2,500.

However, the cost of other household bills has risen over the past 12 months. The typical cost of car insurance has increased by £279 in February year-on-year and home insurance has risen by £50 within the same time period.

Council tax for a Band D property is also set to increase by an average of £106 while water bills will typically rise by £25.

Combined, these bills cost households £460 more than last year. In addition, broadband, TV, and mobile phone bills will typically increase in April in line with inflation.

 It remains as important as ever in the current financial climate to compare prices and shop around where possible ahead of purchasing or renewing your household bills.

Andy Hancock, Chief Growth Officer at Compare the Market, comments: “The predicted fall in annual bills overall is a rare piece of good news following the continuous long-standing pressure on household budgets.

“The decline in the cost of energy will be welcomed by many households across the UK. However, it’s important to note that household bills are still considerably higher than two years ago.

“Shopping around for cheaper deals on household bills remains one of the best ways for anyone to try and save money.

“You could save a significant amount of money by checking for deals on your regular bills when they’re up for renewal, such as car and home insurance, broadband, and credit cards.”