6 household costs rising in 2025 and how to beat them

The cost of living doesn't look likely to ease in 2025, with several household costs and bills confirmed to rise.

From the end of the £2 bus fare cap in January to rising council tax for many in April, households are preparing for higher costs in 2025.  

While these rises may seem inevitable, there are steps you can take to ease the burden. Here’s a closer look at what’s going up and when, and more importantly, how to beat it. 

1. Energy bills – 1 January 

From 1 January 2025, the energy price cap will rise by 1.2%, increasing the cost for typical medium-use households to around £1,738 annually or £145 per month. The cap is reviewed every three months, so will be updated in March.

The cap limits the price suppliers can charge per unit of gas or electricity for customers on standard variable tariffs. It’s not a cap on your total bill, which depends on how much energy you use. 

How to beat it

If you’re considering a fixed energy tariff, weigh up how much you’d pay over the full contract compared with a variable tariff. 

When we last checked on 22 November 2024, we found 27 fixed tariffs costing less than the upcoming price cap, with the cheapest saving a typical medium-use household £169 a year, or around £14 per month.

You can also cut your bills by improving energy efficiency at home, such as adding insulation, draughtproofing or using appliances more effectively

• Find out more: 10 ways to save on energy bills

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2. Bus fares  – 1 January 

The £2 bus fare cap in England, introduced in January 2023 to help with travel costs during the cost-of-living crisis, is set to rise to £3 on 1 January 2025 – a 50% increase. 

This cap applies to most single bus journeys outside London, covering over 130 operators, including Stagecoach, Arriva, and National Express.

The cap was designed to encourage bus use and make public transport more accessible. It led to savings of £12 per journey on the most expensive routes. 

How to beat it

For frequent travellers, weekly or monthly passes often offer better value than single tickets. For example, Stagecoach’s MegaRider pass costs £15-20 per week, depending on the region, and provides unlimited travel within designated areas.

Bundle tickets are another way to save, allowing you to buy multiple journeys at a discount. Arriva’s 12-Day Bundle costs £48 in Greater Manchester, working out at £4 per day. Prices and availability vary by location and route.

Concessionary travel schemes provide free or discounted fares for pensioners and people with disabilities, with most local authorities participating in these programmes.

Some operators also offer student discounts, such as Stagecoach’s student passes, which can save up to 40% compared to standard fares. Check with your local bus operator for specific student discounts.

• Find out more: over 60s perks and benefits 

3. Rail fares and railcards  –  2 March

Regulated train fares in England are set to increase by up to 4.6% on 2 March 2025. 

Regulated fares include season tickets covering most commuter routes and some off-peak return tickets on long-distance journeys. Train operators are free to set prices for unregulated fares, which typically rise by similar amounts.

Railcards will also see price increases, with annual costs rising from £30 to £35 as announced in the Autumn Budget. The Disabled Persons Railcard is excluded from this increase and will remain at £20. Most railcards provide a third off train fares, though some come with restrictions.

Train fares are devolved, meaning Scotland and Wales set their own policies, and fare changes in these nations have not yet been announced. In Northern Ireland, Translink sets train fares for its scheduled rail services, and no fare hikes have been announced for 2025.

How to beat it

If your railcard is due for renewal around the time of the price increase, renewing it before 2 March 2025 will avoid the higher cost of £35 set to take effect after this date. 

A three-year railcard, currently priced at £70, offers even greater savings, working out cheaper than renewing annually at the current or future rate.

For regular travellers, purchasing a season ticket before the train fare rise is another way to save. Booking tickets in advance or choosing to travel during off-peak hours often results in lower fares. 

Another option is split-ticketing, where buying separate tickets for different legs of your journey can reduce overall costs.

• Find out more: how to save on Christmas train tickets

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4. Council tax – 1 April

Council tax bills are expected to rise across England and Wales from April. 

Most councils in England are able to raise council tax rates by 5% without needing to call a referendum. Based on the current average Band D council tax bill in England of £2,171, this would mean a rise of £109.

In Scotland, it was revealed during the Scottish Budget that there will be no limit set on council tax rises for 2025-26. This means Scottish residents could see a rise in their council tax bill from April. 

How to beat it

Check if you qualify for any council tax discounts or exemptions. Single-person households, for instance, can receive a 25% discount, while certain disabilities or low-income statuses may make you eligible for reductions. 

Some councils also offer hardship schemes or discretionary relief for those struggling to pay.

• Find out more: how to get a council tax reduction or refund

5. TV licence – 1 April

The cost of a TV licence is set to increase by £5 to £174.50 from 1 April 2025. 

The licence is required if you watch or record live TV on any channel, or use BBC iPlayer.

How to beat it

If you only watch on-demand services such as Netflix, Amazon Prime Video, or Disney+, and don’t watch live TV or BBC iPlayer, you may not need a TV licence.

For those who do need one, spreading the cost through monthly or quarterly payments can make it easier to manage, though there may be a small charge for this. 

Households with anyone aged 75 or over who receives pension credit can apply for a free licence, so it’s worth checking eligibility for this benefit.

• Find out more: how to apply for pension credit

6. Water bills – 1 April

Water bills in England and Wales are expected to rise significantly from April 2025. 

The regulator, Ofwat, 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 steeper rises, with final decisions expected later this month.

How to beat it

Switching to a water meter could save money if your household uses less water than average. A useful rule of thumb is that it’s often cost-effective if the number of people in your home is fewer than the number of bedrooms. 

Many water companies also offer social tariffs, which can cut bills by up to 50% for eligible low-income households. 

Additionally, the WaterSure scheme caps bills for households with high essential water use, such as those with medical needs or large families. Check with your provider to see if you qualify.

• Find out more: how to save on water bill price hikes