Energy Bills Will Soar To £3,549 A Year From October, Ofgem Announces

Fears raised that families will be forced to choose between “eating or heating” as the average energy bill is hiked by more than 80 per cent.
On Friday the British energy regulator Ofgem announced the price cap set to come in on October 1.
On Friday the British energy regulator Ofgem announced the price cap set to come in on October 1.
Illustration: Chris McGonigal/HuffPost; Photos: Getty Images

Millions of Brits face fuel poverty this winter after it was announced the energy price cap will soar to a devastating £3,549 in October.

Ofgem, the UK’s energy regulator, revealed on Friday morning that the average energy bill will be hiked by more than 80 per cent in the autumn.

The price cap is the maximum amount suppliers can charge customers for each unit of energy.

It was originally designed to protect customers from short-term price spikes. The latest rise will come into effect on October 1 and remain in place until December 31 when it will be adjusted again.

In a stark comparison, the average bill in October 2021 was £1,400 a year.

“I talk to customers regularly and I know that today’s news will be very worrying for many.”

- Jonathan Brearley, CEO of Ofgem

Up to 4.5 million pre-payment meter customers, who are often the most vulnerable and already in fuel poverty, will see their average annual bill set to go up to £3,608.

And experts fear prices could spike at as much as £5,386 in January and £6,616 in April next year.

Charities have warned that many face hardship during the colder months when they are forced to choose between “eating or heating”.

Becca Lyon from Save the Children described the cap as “a full-blown economic crisis for thousands of families”.

She warned: “Children are at serious risk from today’s announcement and could spend this winter in cold homes, with fewer hot meals, despite the best efforts of their parents and carers. Our children deserve better.”

The chief executive of Ofgem used the grim announcement to urge the incoming prime minister to “act further” to tackle the impact of price rises.

Today's announcement signals only the start of the huge issues facing the next prime minister.
Today's announcement signals only the start of the huge issues facing the next prime minister.
PA - PA Images via Getty Images

CEO Jonathan Brearley said: “The government support package is delivering help right now, but it’s clear the new prime minister will need to act further to tackle the impact of the price rises that are coming in October and next year.

“We are working with ministers, consumer groups and industry on a set of options for the incoming prime minister that will require urgent action.”

Rishi Sunak has promised more money to help with energy bills, while Liz Truss pledged to immediately reverse the rise in national insurance.

Truss, who was previously skeptical of “handouts”, has now promised in today’s Daily Mail to deliver “immediate support” and “decisive action” if made prime minister.

How Can You Cut Back On Energy Use?

Switch off and unplug

Energy Saving Trust calculates that you can save around £55 a year just by remembering to turn your appliances off standby mode.

Check your boiler

A report by the Heating and Hot Water Council found that households can save around 6 per cent to 8 per cent on their gas bill by turning down the heating flow temperature on their condensing combi boiler.

Doing this will allow the boiler to run more efficiently and could save around £200 off an average energy bill.

Another easy saving is to turn off the pre-heat mode on the boiler, which could mean hot water taps taking longer to heat up, but could save hundreds of pounds a year.

Forget tumble drying and use appliances wisely

When you can, hang clothes outside to dry instead and invest in a drying rack for cooler months.

Use your washing machine on a 30C cycle and reduce use by one run a week. Only run your dishwasher when it is full and use eco settings if possible.

Avoid overfilling the kettle – only boil the amount you need.

Defrost your fridge and freezer

Remember to regularly defrost your fridge and freezer, as the more they ice up the more energy they will use.

A full freezer is more economical to run. With a full freezer, the cold air does not need to circulate as much, so less power is needed. If you have lots of free space, half-fill plastic bottles with water and use these to fill gaps.

Turn off lights

Turn lights off when you are not using them or when you leave a room. Replacing all the lights in your home with LED bulbs could help save even more.

Keep windows closed when temperatures get hot

It is best to use blinds and curtains to block direct sunlight during the day and then open the windows at night when temperatures drop, helping you to save energy by reducing the need for power-hungry fans.

Use fans sparingly

Fans, even when used on cooling settings, will send bills soaring.

Putting fans at floor level helps to circulate the lower cold air rather than the warmer air that naturally rises in a room.

Invest in insulation

The Energy and Climate Intelligence Unit found that homes rated band F on the EPC measure of efficiency are set to have a gas bill £968 higher than a home on a band C - the government’s target for 2035.

The average home in the UK is rated band D and these homes will pay £420 more for their gas this winter, compared to a band C.

The trust said that those wishing to future-proof their homes, investing in professional draught-proofing and insulation in preparation for the winter months could lead to a reduction in bills by £405 for a semi-detached home.

Installing solar panels for a similar property could lead to additional annual savings of around £450.

The current chancellor Nadhim Zahawi said he knew the announcement would cause “stress and anxiety” for many people, but stressed that help was on its way.

He added: “While Putin is driving up energy prices in revenge for our support of Ukraine’s brave struggle for freedom, I am working flat out to develop options for further support.

“This will mean the incoming prime minister can hit the ground running and deliver support to those who need it most, as soon as possible.”

Ofgem chief executive Jonathan Brearley used the announcement to heap pressure on the next prime minister.
Ofgem chief executive Jonathan Brearley used the announcement to heap pressure on the next prime minister.
House of Commons - PA Images via Getty Images

Boris Johnson’s government previously announced a raft of measures to help people cope with soaring bills - however critics argue they do not go anywhere near far enough.

Households should start receiving £400 off their energy bills from October, with the discount made in six instalments.

They also signed-off a one-off cost of living payment of £150 from September 20 for those on disability benefits.

Meanwhile, more than eight million low-income households on means-tested benefits will also receive £324 - the second instalment of a cost-of-living payment - this autumn. The first instalment of £326 was made in July.

Pensioners who receive the winter fuel payment - worth £200-£300 - will receive an additional one-off £300 in November or December.

Why Has The Price Cap Soared?

The increase reflects the continued rise in global wholesale gas prices.

They started to surge as the world unlocked from the Covid pandemic but was then driven to record levels by Russia slowly switching off gas supplies to Europe.

Ofgem CEO Jonathan Brearley said the sky rocketing prices were driven by an “aggressive economic” act by the Russian state.

He added: “They have slowly and deliberately turned off the gas supplies to Europe causing harm to our households, businesses and wider economy. Ofgem has no choice but to reflect these cost increases in the price cap.”

No 10 previously said there would be no new support offered before a new prime minister is appointed on September 5.

The Labour Party wants the energy price cap to be frozen at its current level and paid for partly by a big increase in tax on oil and gas company profits.

A number of bosses have also called on the government to introduce an Energy Tariff Deficit Fund to spread out the cost for households over a decade, assuming prices eventually fall.

Labour’s shadow chancellor Rachel Reeves said the rise was “incredibly worrying” and would “strike fear” in the heart of many families.

“We cannot wait any longer to act,” she added. “This is a national emergency. The Tories must freeze energy bills now so households don’t pay a penny more in winter.”


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