Winter bills chiller
Energy cost ‘likely to top £3.3k a year in January’
ENERGY bills are on track to hit £3,300 a year, householders have been warned.
Experts say a price cap for 23 million homes will, as things stands, surge by 64% to more than £3,200 a year in October.
And they forecast it could rise even higher in January, to above £3,300 a year for average use on default tariffs.
The increases will be a major blow to millions already battling to make ends meet, and follow fears about Russia slashing gas supplies to Europe.
Germany this week began rationing hot water, dimming street lights and shutting swimming pools as the energy crunch worsened.
Russia is closing its main pipeline,
Nord Stream 1, to Germany for 10 days of maintenance.
But many worry that it may not reopen, given tensions between Russia and the West over the war in Ukraine.
While little of the UK’s gas comes directly from Russia, it is heavily affected by the wider rise in wholesale gas and electricity prices.
Energy regulator Ofgem currently changes the price cap – which impacts those on standard tariffs and prepayment meters – twice a year.
It jumped from an average £1,277 to £1,971 in April.
Ofgem’s change in October is based on wholesale prices over a six-month window that ends in mid-August. With a little over a month to go, it seems certain the cap will leap.
Martin Young, a utilities analyst at banking and wealth management group Investec, was among the first to warn in February that the price cap would soar this October. At the time he predicted it would hit £3,000, and he is now the first to predict it will top £3,200.
His forecast was backed by consultants Cornwall Insight, which yesterday estimated the average would soar to £3,244, leaving the average household having to find £270 a month for gas and electricity.
Ofgem is consulting on reviewing the cap every three months. If that happens, Cornwall believes the average bill will jump to £3,363 a year – £280 a month – in January.
Mr Young said: “The cost-of-energy crisis, and broader costof-living crisis, are not going away any time soon.”
Dr Craig Lowrey, principal consultant at Cornwall Insight, said: “Energy consumers face the prospect of a very expensive winter.”
Former Chancellor Rishi Sunak unveiled measures in May to help with soaring bills. But the £400 most will get is small compared to the average £1,273 a year bill due in October.
Morgan Wild, of Citizens Advice, said: “It’s hugely worrying news for families already pummelled by rising costs.”
Low-income households and OAPs will get additional help. However, the latest warnings will pile pressure on the Government to do more.
Simon Francis, of the End Fuel Poverty Coalition, called for “a full package of support to those in fuel poverty now, and measures to ensure no more households become fuel poor.”
It’s hugely worrying news for families already hit by high bills
MORGAN WILD CITIZENS ADVICE