Millions of households are being advised to prepare for increased winter energy costs. Cornwall Insight experts anticipate that the energy regulator Ofgem will raise its price cap to an average of £1,737 annually starting in October, a £17 rise compared to the current level. This unexpected hike, contrary to earlier predictions of lower bills, is partly driven by the expansion of the Warm Home Discount for vulnerable households.
Despite the price cap decrease from July to September to £1,720, covering the low-energy summer period, the upcoming rise in October is expected to hit harder as households typically increase heating usage. Dr. Craig Lowrey of Cornwall Insight expressed concerns over the impending cost increase, emphasizing that while it aims to support those in need, it will lead to higher bills despite lower wholesale energy prices.
The projected £17 yearly increase is estimated to collectively add over £350 million to energy bills, varying based on individual consumption and location. Cornwall Insight foresees a slight drop in the price cap in January, subject to factors like geopolitical shifts, weather patterns, and policy changes affecting energy costs.
The anticipated October price adjustment reflects forthcoming Ofgem changes, including the Warm Home Discount scheme expansion announced in June, providing additional support to millions of households. Households affected by Ofgem’s price cap, particularly those on standard variable tariffs, are encouraged to take action by considering switching to more cost-effective fixed-rate deals.
Scott Byrom, CEO of The Energy Shop, highlights the significance of energy consumption during the colder months and urges consumers to proactively manage their energy expenses. Richard Neudegg from Uswitch.com stresses the importance of preparing for winter energy costs and recommends switching to fixed-rate deals to save money.
The rise in energy bills coincides with increases in grocery and water expenses and poses a risk of further inflation. Simon Francis of the End Fuel Poverty Coalition emphasizes the ongoing energy bill crisis and the need to transition to cleaner, affordable energy sources beyond gas.
A spokesperson from the Department for Energy Security & Net Zero advocates for the government’s clean energy initiatives to stabilize energy costs and enhance consumer protections. Urgent measures are being taken to support families during the winter season, including expanding the Warm Home Discount and improving customer safeguards.