Energy bills are set to rise by £221 a year from today as Ofgem raises its price cap by 13%, bringing the annual cost for a typical household paying by direct debit in England, Scotland, and Wales to £1,862. This represents an increase from the current cap of £1,641, adding approximately £18 per month to the average household's energy costs.
Ofgem has attributed the hike to elevated wholesale gas prices, driven by the continuing conflict in the Middle East. The price cap determines the maximum amount suppliers can charge for unit rates and standing charges, but actual bills may be higher or lower depending on usage.
Price Cap Below 2022 Crisis Levels
The new cap remains below the levels seen during the peak of the energy crisis in 2022, when the government imposed a ceiling on bills of £2,500. However, consumer groups warn that many households are still struggling with the legacy of that crisis.
National Energy Action (NEA) has warned that households already struggling with their bills now face a summer of ongoing financial pressure and uncomfortable, unsafe homes. The charity fears that without action, the response to people struggling to pay their bills will shift towards tighter debt collection, including a greater use of forced prepayment meters, which risks some households losing access to heating and energy altogether.
Public Health Emergency Warning
Adam Scorer, Chief Executive at National Energy Action, said: “The price cap rise should be a red energy warning. Energy inefficient homes take lives in winter and will increasingly threaten the most vulnerable in summer.”
“Fuel poverty means many cannot experience a comfortable and safe temperature at home, because the building fabric makes it impossible or the cost of doing so makes it prohibitive. This is a public health emergency for the most vulnerable and needs to be addressed as such.”
Debt Crisis and Call for Action
Scorer added: “Tomorrow’s cap rise is another blow for millions already struggling. The legacy of the energy crisis is millions of households locked into debt they cannot repay, and that is pushing up bills for everyone. If we fail to act, we risk seeing more households forced onto prepayment and effectively cut off from energy. That cannot be the answer to a problem caused by unaffordable bills.”
“We need urgent action to clear this debt and stop costs being baked into the system. The right response is to scale debt relief. As our new paper, Clearing the Decks, sets out, that means enabling and expanding Ofgem’s Debt Relief Scheme with additional funding so more of this debt can be cleared, reducing harm and lowering costs across bills.”
Consumers can use their existing bills to gauge how much their energy costs will change by using an interactive calculator provided by the news source. The price cap does not set a maximum on total bills but limits daily standing charges and individual unit rates.
