Higher Winter Energy Costs

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【Summary】Despite Ofgem's lower price cap, households will pay more for energy this winter compared to last winter, according to research by Citizens Advice. The average monthly energy bill is expected to be £32.33 higher than the same period in 2023. The charity warns that the revised price cap will not sufficiently help lower-income households who struggle to cover essential bills.

FutureCar Staff Aug 25, 2023 10:20 AM PT

Millions of households are expected to pay more for energy this winter compared to last, despite Ofgem's lower price cap, according to research by Citizens Advice. The average monthly energy bill paid by households between January and March 2024 is projected to be £32.33 higher than the same period in 2023. Although Ofgem has lowered the energy price cap, the charity warns that it will have limited impact on lower income households who are already struggling to cover essential bills.

Gillian Cooper, head of energy policy at Citizens Advice, emphasizes the urgent need for targeted support from the government, stating that increasing numbers of people don't have enough income to cover their essential bills. She predicts that the coming months will be as challenging, if not worse, than last winter for these households.

The current price cap, which sets the maximum price energy suppliers can charge consumers, is still significantly higher than it was in October 2021. Despite a decrease in wholesale prices, the price cap remains 60% higher than it was two years ago. National Energy Action highlights that the price cap fails to protect those who cannot afford the cost of heating their homes and calls for direct government intervention through bill support, social tariffs, and energy efficiency measures.

It is emphasized that vulnerable households will face high bills and increasing energy debt this winter without targeted financial support. The absence of such support will lead to unheated homes and mounting debt, putting additional strain on the NHS and charities like National Energy Action. The organization urges the UK government to take action by directly reducing energy bills through targeted discounts or a more focused Energy Price Guarantee for low-income and vulnerable households.

Ofgem reviews the maximum prices that energy companies can charge every three months, taking into account factors such as wholesale energy costs, supply costs, and VAT.