A perfect storm: Rising energy, health insurance and food bills pile pressure on Irish families

The Commission for Regulation of Utilities (CRU) has announced further increases on electricity network charges that will see an average of €29 added to a typical annual household bill.

Consumers have been hit with a fresh wave of price hikes, with energy bills and health insurance on the rise again, heaping further pressure on households already facing soaring food costs. 

The Commission for Regulation of Utilities (CRU) has announced further increases on electricity network charges that will see an average of €29 added to a typical annual household bill if, as expected, the price rise is fully passed on to customers.

It follows a hike of just over €100 to network charges last year, with further rises expected in the coming years to fund upgrades and maintenance to the electricity grid.

“This year’s increase in network charges reflects the growing need to invest in a more resilient, smarter, and cleaner electricity grid,” commissioner Fergal Mulligan said.

Electricity prices in Ireland are already among the highest in Europe, and remain 70-80% higher than the period before the outbreak of war in Ukraine in 2022.

Daragh Cassidy, head of communications at the consumer price comparison organisation Bonkers.ie, said electricity charges were expected to rise further, as the grid needs billions of euros of investment to cope with data centre demand, a growing population, and the transition to net-zero emissions. 

“Network charges or ‘grid fees’ already make up around a third of the overall price we pay for our electricity in Ireland, which is among the highest in Europe, and the CRU has already flagged that there will be further hikes to these fees over the coming years, unfortunately,” Mr Cassidy said.

This hike, on the back of the hike we saw last year, makes it much less likely that we'll see any fall in electricity bills for consumers any time soon.

Separately, health insurance company VHI became the third health insurer in as many weeks to announce a price increase, with premiums to rise by 3% on average from October 1.

The company pinned the blame on increased demand for healthcare, as well as increased costs to deliver this care.

The increase could add more than €200 to some adults on higher plans, while a typical family could see a rise of about €180.

“We ensure that our members can continue to access the care that they need and, therefore, have to price accordingly,” VHI Insurance managing director Aaron Keogh said.

Grocery inflation continues to rise, and now stands at 5.86%, new figures show.

Mr Keogh said significant shifts would be needed in how healthcare was delivered to meet the demand of Ireland's ageing population.

Experts have warned consumers could see even bigger increases than the quoted average with potentially hundreds of euros set to be added to premiums in the year to come.

Expert Dermot Goode, from Health Insurance Ireland, said with all price hikes, members needed to be wary of average figures quoted by health insurers as they face into a “perfect storm” of price hikes.

“In some cases, the actual increase could be much higher depending on the plan held,” he said. 

The cumulative impact of multiple rate hikes since the last renewal could leave members facing total increases of 6%-10%, or even higher, depending on the plan in question.

“Nearly half the market, or 1.25 million health insurance customers, are due to renew their cover between November and February and all insurers are increasing their rates now in advance of this peak renewal period.” 

These rises come as pressure on household finances continues on several other fronts.

Figures released by Worldpanel earlier this week revealed grocery inflation continues to rise, and now stands at 5.86%. The general rate of inflation in the economy, meanwhile, is at just 1.7%.

While households continue to deal with surging prices, the Government has already ruled out one-off measures to support families that have marked recent budgets ahead of the next one this October.