Pension warning: Retirees face a £1,780 extra savings burden as 'Awful April' price rises loom - full list of increases

Britons are facing a £49.45 monthly increase in essential costs from April 2025, forcing them to boost their emergency savings by up to £1,780 just to keep up.

With rising energy bills, council tax hikes, and higher costs for water, broadband, and car tax, many retirees will see their already stretched budgets under even more pressure.

According to the HL Savings & Resilience Barometer, retirees typically need one to three years' worth of essential expenses in savings to maintain financial security.

However, with everyday costs climbing, the amount needed for a sufficient emergency fund is rising too.

Sarah Coles, head of personal finance at Hargreaves Lansdown said: "April is going to be every bit as awful as you'd expect this year.

"Price hikes will squeeze household budgets even harder, and it also has a knock-on effect on how much we need in emergency savings."

Several major household bills are increasing from April 2025, adding hundreds of pounds to Britons’ annual expenses:

• Energy Bills – The price cap will rise by 6.4 per cent, adding £111 a year to the average household bill.
• Council Tax – Local authorities can increase tax by up to five per cent, meaning Band D households could pay £109 more per year.
• Water Bills – Set to rise by an average of £123 per year, marking a 26 per cent increase.
• Broadband & Mobile – Mid-contract price hikes will see average bills rise by £50.40 annually.
• Car Tax – Standard rates will rise to £195, with new petrol and diesel vehicles facing first-year charges up to £440. New electric vehicles will also be taxed for the first time, at £195 per year.
• TV Licence – The cost of a standard colour TV licence will increase by £5 to £174.50 per year.

For those aiming to cover three years’ worth of expenses, savings need to increase from £74,232 to £76,012—an extra £1,780.

Working-age households are also under pressure. The average household currently spends £2,062 per month on essentials, rising to £3,366 for top earners and falling to £707 for the lowest earners.

To maintain their financial security, working people should aim to set aside 3-6 months’ worth of expenses in an emergency fund. This means they’ll need to add between £148 and £297 to their savings just to keep up with rising costs.

However, as Coles points out, many households are already struggling to meet their savings targets.

She said: "You’d be forgiven for thinking that at a time when so many costs are rising, the last thing you need is to put more money away.

"But the sooner you can build your savings pot, the better—because you never know when an emergency will strike."

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Coles advises people to assess their individual financial situation when determining how much they need in emergency savings.

She said: "If you have dependents, a variable income, or past health issues, you’ll likely need a bigger emergency fund.

"But if you have a stable job, good health, and family support, you might feel comfortable with less."

For storing emergency funds, Coles recommends easy-access savings accounts or cash ISAs to ensure money is readily available when needed.

She added: "Check online banks and cash savings platforms, as they often offer better rates."

While prioritising emergency savings is essential, Coles warns against neglecting other financial goals.

She warned: "It often makes sense to save for emergencies and contribute to pensions at the same time.

"If you have surplus income, you could split it—part into savings, part into retirement investments—so you’re prepared for both the short term and the future."