The UK inflation rate increased from 2.6 per cent in March to 3.5 per cent in April.
UK inflation surged to its highest level for more than a year last month after households were hit by a raft of “awful April” bill increases, official figures have revealed. The Office for National Statistics (ONS) said Consumer Prices Index (CPI) inflation hit 3.5 per cent in April, up from 2.6 per cent in March and the highest since January 2024.
It comes after Ofgem’s energy price cap rose by 6.4 per cent in April, having fallen a year earlier, alongside a raft of bill rises for under-pressure households, including steep increases to water charges, Council Tax, mobile and broadband tariffs.
Amy Knight, personal finance expert at NerdWallet UK, breaks down the latest inflation data, sharing practical tips to help people make their money go further over this May bank holiday weekend.
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The financial expert said: After last month’s barrage of price hikes – which added around £360 to the average household’s outgoings – this inflation spike is no surprise. Housing and household services were among the largest upward contributors to April’s inflation figures.
“Energy, water, broadband and Council Tax bills all rose sharply, and some households will have been caught off guard by the number of increases that landed last month. When budgets can’t stretch, dipping into savings is often the only option, something likely to show up in future household saving data.
“With inflation expected to stick at 3 per cent or higher all year, it’s especially important to shop around for a competitive savings rate. Earning more interest on your cash helps protect its value and gives you more spending power when everyday costs keep climbing.”
She added: “Until inflation settles (forecasts suggest it won’t return to 2% until 2027) households need to keep budgeting carefully and businesses will need to plan for continued pressure on costs and on consumer confidence.”
Top tips to beat inflation over the bank holiday weekend
Take a meter reading and save £215
Amy explained: “InYourArea suggests that the average household energy bill credit balance across 2024 was £215. If you don’t have a smart meter, your energy supplier may rely on estimated readings to calculate your bills. These estimates can sometimes be higher than your actual usage, leading to overpayment.
“One accurate reading could set your bill straight and in some cases could even put you in credit, some of which you may be able to withdraw.
“If you haven’t already, download the mobile app for your energy supplier and add your reading directly into your account. Alternatively, you can submit the reading via email. Remember to take a photo for your own records.”
Audit your subscriptions and save £240 per year
Amy said: “From streaming services to forgotten fitness apps, subscriptions can quietly drain your bank account. As prices rise, research by Barclays revealed that three in ten Brits feel they are getting less value from their subscriptions.
“Review your direct debits and cancel anything you’re not using, especially as warmer weather means you might spend less time in front of the TV. If you cut just two monthly subscriptions at £8 – £10 each, you could save up to £240 over the year.”
Make small cuts to your grocery spend and save £312 per year
Amy explained: “If you’ve not adjusted your budget since bills went up in April, you could find yourself running out of funds. The good news is, you may be able to recover most of that £360 by tweaking your expenditure.
“Take time over the long weekend to go through your income and outgoings to see where you can trim costs. Even small changes, like switching to own-brand groceries or reducing impulse buys, can cut costs significantly. Reducing your weekly grocery spend by just £6 could save you £312 over a year.”
Switch your savings account and save £150 per year
Amy said: “The Bank of England recently cut the base rate, which means your savings account might not offer the interest rate you signed up for. The long weekend is great time to review whether your money could be working harder for you somewhere else.
“Money you keep as cash is devalued by inflation – the rate at which prices increase over time. The same applies to money that’s trapped in low interest accounts. If prices rise faster than your money grows, your spending power will diminish, making the things you want and need less affordable.
“If you’ve got money sitting in a savings account earning just 1.5%, you’re missing out on a potential £150 of interest. There are easy-access savings accounts currently offering around 4.5% which can help you ‘beat inflation’. Your money needs to earn interest faster than the inflation rate, so check your current rate and shop around. Many savings accounts can be opened from your mobile phone, from a deckchair or your sofa.”
Consolidate your pensions to save on fees and save £100 (per £10,000, per year)
Amy explained: “Some pensions come with high fees which nibble away at your retirement savings. Consolidating to a low-fee provider could save you £100+ per £10,000 pot in charges over a year, meaning your money will grow that little bit faster.
“Start by tracking down any lost pension pots using the free Pensions Tracing Service to see if you’ve got money sitting in forgotten pots from previous jobs. Don’t disregard small pots from jobs you didn’t stay at for long: Those savings combined can add up to an amount worth having and pension pots abandoned decades ago could have grown substantially.
“Once found, moving old pots into a single provider like PensionBee or Moneybox to make them easier to manage and can bring down fees. But don’t move final salary or defined benefit pensions without seeking independent advice first.”
