Energy price cap to fall but one in three households will face higher bills
If you’re struggling to pay your energy bills
More than 7m households will face higher heating bills this winter than last, despite the fact the Ofgem energy price cap will fall to £1,923 from October.
This is the amount that an average household using a typical amount of gas and electricity can expect their annual bills to be. However, if your energy consumption is especially low or high, you could pay much less or more than t, as the cap only limits the amount suppliers can charge per unit of energy rather than how much you’ll pay overall.
The Energy Price Guarantee last winter was set at £2,500 for an average household, but the government’s £400 energy support for every household brought this down to an effective cap of £2,100. Although the price per unit of energy is falling, analysis carried out by the Resolution Foundation found that this will be offset by a rise in the daily standing charge and the loss of the £400 support. It estimates that almost 3m households will see their bills rise by over £100.
Jonny Marshall, Senior Economist at the Resolution Foundation, said: “Falling wholesale gas prices have finally brought the energy price cap down below £2,000. However, this is still over 50% higher than families were used to before Russia invaded Ukraine, while the end of the £400 universal payments and rising standing charges mean that over one-in-three families across England will face higher bills this winter than last.”
Separate research carried out by charity Citizens Advice reveals that almost eight million people had to borrow money to pay their energy bills in the first half of 2023, with these numbers expected to increase as we head towards winter. The average amount of energy debt owed by the people the charity helps currently stands at around £1,711.
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Dame Clare Moriarty, chief executive of Citizens Advice, said: “What we saw last winter must never be repeated. Struggling households unable to pay their energy bills, people unable to top up their prepayment meter, and record numbers coming to us for crisis support.
“With increasing numbers of people we help facing a negative budget, where they simply don’t have enough to cover their essential bills, there is a real risk this winter will be worse. The government should look seriously at stepping in with additional bill support to help people through the winter.”
If you’re struggling to pay your energy bills
If you’re falling behind with your energy bills and can’t see a way out, it’s vital that you don’t suffer in silence. Talk to your energy supplier as soon as possible and let them know you’re having problems paying. They might be able to arrange a more affordable repayment plan, for example, or see whether you might be able to move onto a slightly cheaper tariff.
A spokesman for Hargreaves Lansdown said: “Your supplier may offer non-repayable grants to people suffering real financial difficulties. The major energy providers tend to offer them to their own customers – including EDF, E.on Next, Shell and Scottish Power. British Gas Energy Trust offers grants to people who are struggling – regardless of whether they are a British Gas customer.
“You need to contact them and check their eligibility rules and how to apply. The process can be onerous, so don’t be afraid to ask for help with it from charities like Stepchange and Citizens Advice.”