Household energy bills will rise above £3,000-a-year by winterJuly 6, 2022
Household energy bills will rise above £3,000-a-year by winter – £200 higher than regulator’s prediction, industry sources say
- Charity warns of ‘few signs of energy prices becoming affordable’ this winter
- Comes as families already battling soaring food and fuel prices as inflation rises
- The £3,000 bill predicted for winter is £200 higher than Ofgem predicted in May
- Bank of England also warned today that economy has ‘deteriorated materially’
Household energy bills are to rise above £3,000-a-year – £200 higher than the regulator’s prediction, industry sources have said.
Fuel poverty charity National Energy Action says there are ‘few signs of energy prices becoming affordable this winter’ amid a jump that is seven per cent higher than forecast by Ofgem ahead of the government’s recent cost of living support package.
It comes as families are already battling soaring food and fuel prices after inflation rose to a whopping 9.1 per cent in May and is predicted to rise as high as 11 per cent later this year.
The government has said it does not recognise the rise in energy bills, adding that it will ‘keep a close watch’ along with Ofgem, the BBC reports.
But the £3,000 bill predicted for the winter is £200 higher than Ofgem predicted in May.
From May 2021 to May this year, home gas prices rose by 85 per cent and home electricity prices rose by 54 per cent, according to government figures.
The chief executive of Ofgem said in May that he expected the energy price cap rise again around £2,800 in October 2022 – around a 40 per cent rise.
Bills already rose by £700 on average in April, placing a further squeeze on families.
The £3,000 bill predicted for the winter is £200 higher than Ofgem predicted in May, ahead of the government’s recent cost of living support package
The Bank of England also warned today that the economy has ‘deteriorated materially’.
In a gloomy update, the Bank said households were facing a serious squeeze on their finances – and warned of a wave of company collapses.
And Danni Hewson, a financial analyst at investment platform AJ Bell, said: ‘There’s a long, cold winter waiting in the wings.’
Energy prices have been pushed up by Russia’s invasion of Ukraine, and more recently by strikes in Norway.
This is proving difficult not only for households – who are set to be slapped with another hike to their bills when energy regulator Ofgem next reviews the price cap in October – but also for businesses.
Almost a third of small and medium-sized firms don’t have enough cash to last them a week, according to the Bank’s report.
The official energy price cap for England, Wales and Scotland is due to be announced by Ofgem next month, the period during which it is assessed is nearly complete.
Prices for gas to be delivered this winter have increased sharply in recent weeks, with the price paid per therm of gas rising above £4.
This is attributed to a fall in the volume of gas exported from Russia, the weaker value of sterling and the closure of a gas export facility in the US.
Dual fuel users paying by direct debit faces an energy bill of £3,018 per year, while it will be an average of £3,147 for those paying by a prepayment meter.
Former Chancellor Rishi Sunak unveiled a fresh £15billion cost-of-living bailout at the end of May, with every household getting hundreds of pounds off their sky-rocketing bills – and some pocketing up to £1,650.
Mr Sunak announced a massive new package of help for struggling families after watchdogs warned that the Ukraine crisis means energy costs are set to soar again this Autumn – by more than 40 per cent.
He said eight million households on benefits will also get a £650 handout, paid in two stages in July and autumn – which will cost the Treasury £5billion.
It means that most of those families could be due a total of £1,200 over the coming months, including the previously-announced £150 council tax rebate for band A-D properties.
The Bank of England has also warned today that the economy has ‘deteriorated materially’
Pensioners who get winter fuel allowance will receive £300 extra, and he confirmed that the triple-lock will be applied to the state pension this year – likely to entail a double-digit increase. People on disabled benefits will get an additional £150.
The maximum that anyone could receive as a result of this package and the one earlier in the year is £1,650, according to the Treasury.
But the package was based on Ofgem predictions that household dual fuel bills would be £2,800 a year.
National Energy Action chief executive Adam Scorer told the BBC: ‘The government’s package of support will lessen, but not avoid the pain.
‘Millions will simply not be able to heat their homes. We will see serious ill health and early deaths for those most susceptible to the cold.
‘This crisis will not just be measured in the cost of living. It will have a tragic cost in lives. We need to prepare for a winter unlike any other.’
A government spokesperson added: ‘We understand that global inflationary pressures are squeezing household finances which is why the government has introduced an extraordinary £37 billion package to help households, including £1,200 each for eight million of the most vulnerable households.’
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