Many households across the UK are only just managing to pay for their gas and electricity bills, but now need to prepare for even higher charges from springtime.
Billpayers could find themselves in even hotter water – excuse the pun – when changes to the Energy Price Guarantee come into effect in April 2023.
The government had capped energy bills at £2,500 per annum for a typical household in October last year. However, this is only set to last until the end of March.
After this point, it will increase to £3,000 per year based on the usage of a typical household. Of course, many families could end up paying more than this if they live in a large house or with several occupants.
According to Ofgem, a ‘typical household’ is a two- or three-bedroom house with two to three inhabitants. They use 12,000 kWh of gas on average per year, and 2,900 kWh of electricity.
In comparison, families in four-bedroom houses with four to five inhabitants can expect to use 17,000 kWh of gas and 4,300 kWh of electricity. Therefore, their energy bills could exceed the government’s price cap by a significant amount.
The original Energy Price Guarantee was introduced last year in response to soaring gas and electricity bills on wholesale energy prices. Ofgem introduced its own caps, but these were still substantially higher than what households had been paying.
Its Energy Price Cap between January 1st and March 31st 2023, for instance, is £4,279, nearly £1,800 more than the current Energy Price Gaurantee.
In comparison, the average annual gas bill in 2021 was £564, while typical electricity bills that year were £769, amounting to just £1,333 in total. Therefore, prices are more than three times what they were just two years ago.
While billpayers do not have to worry about paying the extortionate amount Ofgem has capped energy prices at, they are still going to have to pay more than double what they were in 2021.
A spokesperson from Citizens Advice advised people to get help if they need it, stating: “You might be able to take advantage of certain benefits, grants and help offered by the government and energy suppliers.”
For instance, the British Gas Energy Trust is offering some households grants of more than £1,500 in exceptional circumstances.
At the same time, Shell has created a £20 million Helpfund for its customers who need financial assistance and OVO has set up a £50 million Customer Support package. This includes free services, such as smart thermostats, and payment holidays for debt repayment.
E.ON established the E.On Next Energy Fund, which is designed to help customers pay their current or final bills, as well as replace old appliances that are not energy-efficient.
The government also recently announced households living off the grid will receive £200, while businesses will get £150. This is designed to encourage people to use alternative fuels and relieve demand on gas supplies.
One of the best ways Londoners can reduce their energy bills is by repairing boilers in Clapham, as this can make them function better, so they can heat the house up more effectively.