Households Brace for Energy Bill Rise as Hopes for Relief Dwindle
Households across the UK are set to face yet another blow to their finances as energy bills are set to rise once again from January. The anticipated price increase comes as hopes for relief from the ongoing cost-of-living crisis are put on hold. On Thursday, Ofgem, the energy regulator, is expected to announce its latest price cap, with energy consultancy Cornwall Insight predicting a 5% jump from the current £1,834 for a typical dual fuel household to £1,931, which will take effect from January 1.
According to forecasts by Cornwall Insight, although the typical bill is expected to decrease to £1,853 starting from April, it will not drop below today’s level until July next year. These predictions indicate that households will have to contend with higher energy costs throughout the winter months. Cornwall Insight also noted that recent milder weather conditions have helped bring down gas prices, which could potentially lead to reduced bills next year if the trend continues. However, they cautioned that sharp price falls are not expected.
Dr. Craig Lowrey, a principal consultant at Cornwall Insight, expressed concerns about the energy market’s instability and the UK’s dependence on energy imports. He stated, This leaves households facing yet another winter with bills hundreds of pounds higher than pre-pandemic levels, and affordable fixed deals few and far between.
The timing of the price cap announcement is particularly concerning as Chancellor Jeremy Hunt made no mention of further assistance to offset household energy bills in Wednesday’s autumn statement. The lack of action in this regard has sparked criticism, as the average household is now paying £800 more per year since the start of the energy crisis. Critics argue that the Chancellor could have utilized funds from VAT windfall due to higher energy bills and underspent money allocated to help vulnerable people keep warm last year.
Emily Seymour, the energy editor at consumer magazine Which?, advised households struggling to pay higher bills to seek available help. She suggested reaching out to energy providers to discuss payment plans that are affordable and to check eligibility for any government schemes. Seymour also emphasized the importance of taking meter readings on or close to December 31, ensuring accurate billing before the new price cap takes effect. She encouraged regular meter readings to avoid overpayment and ensure correct billing.
Richard Neudegg, the director of regulation at Uswitch.com, expressed concerns about the timing of the price rise, stating it would come at the worst time of year for households as they would be using more energy during one of the coldest points of winter. Neudegg called for reforms to create a more competitive market that protects households, as he deemed the existing price cap system no longer fit for purpose.
As households reluctantly prepare for higher energy bills, it is evident that the cost-of-living crisis continues to affect the most vulnerable in society. The lack of relief measures in the Chancellor’s autumn statement has sparked frustration and disappointment among many. It remains to be seen how households will navigate these increasing financial burdens as the winter months approach.
