Ofgem has announced the energy price cap for April to June is now set to rise by 6.4% from current levels meaning an average annual bill of £1,849 for households paying by direct debit.
This means the average household is set to pay over £800 more per year for their energy compared to winter 2020/21 – a 77% increase.
The Ofgem price cap means that energy firms should not charge more than the set rate for unit rates and daily standing charges for those on standard variable tariffs.
The cost of every unit of gas used will surge by over 10%, meaning the cost of gas is now double what it was in winter 2020/21.
Every unit of electricity will go up almost 9%. Around 40% of the time the cost of electricity is also driven by the price of gas due to the country’s energy system.
While the bad news for consumers mounts up, Ministers have announced that the Warm Home Discount scheme will be expanded from winter 2025/26 to help an additional three million households while debt relief programmes will be improved following a consultation by Ofgem.
And in the latest Climate Change Committee report, the prospect of bills reducing by over £700 a year is a possibility if the nation increases the energy efficiency of homes and moves away from gas for home heating.
As the End Fuel Poverty Coalition commented:
“The prize of significantly lower bills and a more secure energy supply is one worth fighting for. With the country reliant on the USA for more than 10% of its gas and volatile gas markets driving the upcoming increase in energy bills, no wonder the public engagement the Climate Change Committee undertook showed its plan was popular.
“The CCC’s report shows the massive uplift of activity and ambition that we will need to see over the next decade or more.
“This will mean substantial investment from the Government to help with the upfront costs. The starting point for this support must be for the Chancellor to commit £13.2bn in funding for the Warm Homes Plan in the Comprehensive Spending Review.
“A penny less than that and the goal of warmer homes each winter will be impossible to achieve.
“Until the fruits of the CCC’s plan come to fruition, we will also need to see support for vulnerable households with their bills every winter. The Government has announced that it will take measures to expand the Warm Home Discount and tackle the energy debt mountain, but we need this to go to all vulnerable groups who need support and – of course – this too will need to be paid for.
“But let’s not forget that the energy industry continues to make billions of pounds of profit every year, so there is plenty of money in the energy system.”
James Watson-O’Neill, Chief Executive of the national disability charity Sense set out why it is so important to focus on bills, he said:
“Yet another increase in the energy price cap – the third in a row – will dismay many disabled people.
“Disabled households are telling us they’re living in crisis. The need to power crucial equipment, such as feeding machines and hoists, means many disabled people have no choice but to use extra energy. Our research clearly shows that many disabled people with complex needs are already struggling to afford their energy bills, with more than two in five (42 per cent) telling us they can’t afford to keep their home warm enough.
“Disabled people are more likely to be in fuel poverty than non-disabled people, and we know it’s not just extra energy bills that can hit hard. There are also the extra costs associated with specialist diets, insurances, therapies and accessible transport that disabled people need to contend with. An increase in energy costs is the last thing disabled people need.
“There is no end in sight and disabled people cannot be left waiting any longer for targeted help with their energy bills. We need the government to urgently implement a social energy tariff, to help level the playing field for those who rely on energy-intensive equipment.”
Campaign Collective is a campaign partner to the End Fuel Poverty Coalition.