Household costs rose by 5% in the year to December 2023, marking a rise of 24.7% since December 2019, the Office for National Statistics (ONS) has revealed.
According to the latest Household Cost Indices, people with mortgages saw bigger rises in household costs in the past year – with an average of 6.3%.
For private renters it was 4.9% and for those who own outright it was 4%.
The research also revealed that 79% of outright owners were retired – explaining why retired households saw prices rise more slowly, at 4% compared with non-retired at 5.4%
For parents, the group most likely to have a mortgage, household costs rose 5.5% in a year.
In addition, 88% of outstanding mortgages in December were fixed rates – at an average of 3.4%.
A quarter of those with mortgages reported that they will need to remortgage within two years, while they currently pay an average of 3.8%.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “People who are staggering under the weight of their mortgages have paid the price of multiple interest rate hikes.
“Because while interest rates have been hiked to keep a lid on inflation and help keep life more affordable, the reality for this group has felt very different.
“Their household costs have risen far faster than for those who own their own home, and even faster than for renters.
“It means particular groups of people are facing the brunt of higher rates. Newer buyers, who paid more for their homes, are wrestling with bigger mortgages.
“Those with children, around half of whom have a mortgage (compared to a quarter of those without children), are also in the frame for higher mortgage costs.
“Their household costs are up 5.5% in a year – compared to an average of 5%. Given just how expensive life is at this stage, it’s going to mean already stretched budgets are pushed to breaking point.”
Coles added: “Those who are least affected by all of this are retired households, many of whom own outright.
“It’s one reason why their household costs are rising so much more slowly than non-retired households.
“They still have real challenges, particularly the huge numbers of lower incomes who are still dealing with impossible energy bills. However, wealthier retirees will be in an enviable position.”
