Energy Bills Set to Surge: Households Brace for £85 Increase Amid Financial Strain

Domestic energy prices are poised to rise by 5% starting in April 2024, translating to an additional £85 on average annual bills for households, according to forecasts from the consultancy Cornwall Insight. The anticipated increase will bring the total estimated energy bill to £1,823 for a typical household using standard gas and electricity amounts. Energy Secretary Ed Miliband has urged Ofgem, the energy regulator, to swiftly implement measures to protect consumers as this change coincides with anticipated hikes in water and council tax bills.

The expected price cap, currently at £1,738, affects 26 million households on default and variable tariffs. The energy price cap is adjusted every three months, and the latest adjustment will be revealed by Ofgem on February 25. The rise in prices is attributed to unfavorable weather conditions and dwindling gas reserves across Europe, which have led wholesale energy prices to soar. While current bills are approximately 50% higher than pre-pandemic levels, they are still below the peak rates recorded in 2022, following geopolitical tensions related to Russia’s invasion of Ukraine.

High energy prices contribute to a growing collective debt among households, which currently stands at £3.8 billion. On average, households in arrears owe over £1,500 for electricity and £1,300 for gas — a situation exacerbated by the recent hikes in energy costs. The National Energy Action charity has expressed concern over the mounting challenges faced by vulnerable households, labeling the current economic climate as an “interminable winter” for many.

Amid these challenges, the Energy Savings Trust advocates for improvements in home insulation to help lower bills, suggesting the establishment of a national retrofit advisory service. Miliband’s letter to Ofgem further stresses the need for intervention to mitigate the impacts of volatile global gas markets on UK consumers.

To manage energy use effectively as warmer months approach, experts recommend tips such as lowering the boiler temperature, sealing draughts, and limiting shower time to conserve energy and keep costs manageable.