As the colder months approach, households across Great Britain are preparing for another increase in their energy bills. Forecasts from Cornwall Insight, a respected energy consultancy, indicate that the government’s energy price cap is expected to rise by 9% starting in October, resulting in an average dual-fuel energy bill of £1,714 per year for a typical household. The energy regulator, Ofgem, is set to announce the new price cap for the period from October to the end of December by Friday. If the analysts’ predictions hold true, the new cap will be £121 lower than last winter’s energy costs, which were set at £1,835 per year for gas and electricity. The previous increase was mainly attributed to the global surge in energy prices following Russia’s war in Ukraine.
Despite the anticipated decrease compared to last winter, energy bills will still be significantly higher than pre-invasion levels. For instance, during the winter of 2020-21, the price cap was set at £1,216, underscoring the lasting effects of the global energy market disruption. Campaigners have raised concerns that the higher bills this winter will further strain households, many of which have already accrued debts to their energy suppliers due to ongoing price increases. Official statistics reveal that energy debt has soared to a record high of over £3 billion.
Craig Lowrey, a principal consultant at Cornwall Insight, noted that this news is unwelcome for households as they enter the colder months. He pointed out that the prolonged impact of the energy crisis has rendered the market highly volatile and sensitive to negative news regarding supply. While a return to the extreme prices witnessed in recent years is not anticipated, it is also unlikely that bills will revert to what was once considered normal without significant intervention.
Adding to the financial burden, Chancellor Rachel Reeves announced last month that the winter fuel allowance will no longer be universal. Instead, only pensioners on means-tested benefits will qualify for the allowance this winter, potentially leaving hundreds of thousands of pensioners facing significantly higher energy costs during the colder months, according to fuel poverty campaigners at National Energy Action (NEA).
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