April price rises to increase emergency savings needs

Hargreaves Lansdown has calculated that savers will need an extra £1,780 in their rainy-day funds to cover essential expenses once a series of April bill increases take effect, according to research reported by Which? on 12 March 2025¹. The calculation covers water, energy, broadband and mobile bills, TV licences and council tax¹.

Households currently spend an average of £2,062 a month on essentials, a figure that could rise by £49 from April, according to Hargreaves Lansdown¹. Council tax will increase by 5% in most areas of England, while those in Wales and Scotland could pay as much as 15% more in the new financial year¹. Inflation peaked at 11.1% in October 2022¹.

Hargreaves Lansdown advises that working people should hold enough emergency savings to cover three to six months of essential expenses, while retirees need cover for one to three years¹. The table below sets out the fund sizes before and after the April rises.

Source: Hargreaves Lansdown¹

Sarah Coles, head of personal finance at Hargreaves Lansdown, said:

Which? also listed instant-access accounts and instant-access cash Isas by rate, sourced from Moneyfacts and correct as of 11 March 2025, noting that rates are subject to change¹. The highest instant-access rate shown was 4.6% on the GB Bank Easy Access Account, a Raisin exclusive, followed by Sidekick High Yield Cash Reserve at 4.59%, Chip Instant Access Account at 4.58%, Monument Bank Easy Access Account at 4.56% and Kent Reliance Easy Access Account at 4.55%¹. Among instant-access cash Isas, Chip was listed at 5%, Tembo Money at 4.8%, Monument Bank at 4.76%, Kent Reliance at 4.56% and Charter Savings Bank at 4.55%¹. Cash Isas allow up to £20,000 a year to be saved without tax on the interest earned¹.

Why it matters for households

The figures describe the sums people would need to cover essential spending if income stopped, and those sums rise with the April bills. A household covering three months of essentials would need £148 more than before; one covering three years would need £1,780 more¹. The gap between the two reflects Hargreaves Lansdown's view that retirees need a longer runway because it is harder for them to rebuild savings, and that dipping into savings is preferable to drawing down a pension¹.

The council tax picture differs by nation: 5% in most areas of England, against as much as 15% in Wales and Scotland¹. Which? notes that how much any individual needs depends on circumstances such as dependants, health and the reliability of their income¹.

What happens next

The bill increases take effect from April 2025¹. The savings rates quoted were correct as of 11 March 2025 and are subject to change¹. No further dates have been reported.

For background on how much to hold, see emergency funds: what they are and how much to keep, whether emergency savings should sit in a separate account, and the getting-started hub.