UK consumers spent 27% more on gas and electricity bills in Q2 2024 compared to before the cost-of-living crisis (Q4 2021)

Specialist analytics and risk management consultancy, 4most, has revealed that UK consumers spent an average of 24% more on gas and 30% more on electricity bills in Q2 2024 (27% combined average), compared to before the cost-of-living crisis (determined as Q4 2021 for this study).

The widely used Office for National Statistics (ONS) data publications that underpin most affordability calculations for financial institutions, utilities providers, telecoms companies and other credit providers, are published annually for the prior year. In comparison, the 4most Affordability Insights Reporting Service (AIRS) based on unique data from IE Hub provides real-time data across the full range of quarterly consumer expenditure, across categories ranging from energy expenditure, to rent and housing costs, essential travel and other expenditure. 

This allows affordability calculations to be more exact, more reflective of the current pressures on consumers, and more effective at mitigating credit risk – leading to better outcomes for borrowers.

According to 4most’s first Affordability Insights Reporting Service (AIRS) Quarterly Briefing, higher levels of both electricity and gas expenditure are expected to continue through 2024.

Huge differences across household composition

The 4most report also highlights the major differences in gas and electricity expenditure based on the number of dependents in a household. 

While Q2 2024 data has suggested that there have been decreases amongst household groups with one or more dependents, households with no dependents have experienced more of a flat trend. Overall, households with a single dependent – such as new families – have seen the steepest increase in relative energy expenditure since Q4 2021.

Number of dependentsDual fuel expenditure (gas and electricity)
Q4 2021Q4 2022Q4 2023Q2 2024
0£105.5£172.4£122.3£129
1£109.2£183.3£169.3£164.8
2£125.7£223.6£198.8£181.6
3+£171.6£247.8£236£205.3

Figure 1: Monthly dual fuel expenditure (gas and electricity) by number of household dependents, 2021-2024Lenders may often associate the number of dependents with property size, the likelihood of joint mortgages, and income range. However, 4most’s data reveals that the outdated models that lenders are often forced to rely on, may not only underestimate fuel prices, but also often fail to capture sufficient granular detail.

An up-to-date alternative for lenders

4most’s new affordability service, created in partnership with IE Hub, provides a compelling alternative for lenders hoping to use real-time data in their affordability assessments. 

The tool has been compiled using detailed, itemised collection of Income and Expenditure assessments, from consumers who have been referred by their creditors as a result of experiencing – or expecting to experience – difficulties in meeting financial commitments.

Not only does 4most’s Affordability Insights Reporting Service offer lenders a deeper insight into their borrowers, allowing them to make more accurate decisions, the IE Hub web portal (where the data is collected) helps consumers who are struggling financially to identify support in the form of grants, benefits and subsidies. 

Andy Johnson, Client Partner at 4most, comments: 

“When conducting an affordability check, lenders are often faced with the difficult circumstance of estimating the spending pressures on a consumer from datasets that can be a year or more behind the current reality. In the current economy, we all know that a lot can change in a year. Access to real-time data will allow lenders and financial institutions to more accurately measure their credit risk, turning the ‘crystal ball’ into a telescope.  

“Not to mention, borrowers facing financial difficulty may not know about the support that’s available to them. As creditors refer consumers to IE Hub, the process of identifying government grants and subsidies which may be available to them is brought to the fore, ensuring they receive all the support to which they are entitled. For those in challenging circumstances, this is a real boon.”  

Dylan Jones, CEO of IE Hub, adds: “At IE Hub we have built a unique platform proven to help consumers and creditors share affordability information. Our anonymised data set has allowed our partners 4most to create something very powerful.  The affordability tool and dataset could revolutionise the way lenders make borrowing decisions and validate current portfolios. Other affordability publications are behind the curve in offering insight into current market trends, which means lenders need to apply broad-brush scalar adjustments to their affordability assumptions. 

“We feel our data will not only give lenders invaluable and granular insight into the spending habits of UK consumers, but also allow them to make crucial affordability assessments based on the present market rather than outdated statistics.”

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