Typical bill to rise by £21 a year in January
Getty ImagesThe energy regulator has announced that energy bills for a typical home will rise by £21 a year in January.
This means someone paying by direct debit and using typical gas and electricity will pay £1,738 a year, which is still high compared with pre-Covid standards.
Prices rose in October and now for the rest of winter, with charities warning many people will struggle to cope with bills or choose to go without heating during the coldest time of the year.
Regulator Ofgem’s quarterly cap sets limits on the cost per unit of energy, affecting 26 million households in England, Wales and Scotland.
The cap is 1.2% higher than current levels, meaning household bills would typically increase by £1.75 a month.
It was also down 10% compared with the same period last year, but Ofgem said many payers would still be stretched.
Regulator Tim Jarvis said: “We know energy costs remain a challenge for too many households.”
“However, as more tariffs enter the market, there are a number of ways customers can lower their bills, so please shop around and consider all options.”
Debt keeps growing
While the cost of gas and electricity is capped per unit, there is no cap on the total bill. As a result, long, cold winters can lead to higher energy consumption and higher bills.
Energy companies said they have offered additional support to help customers cope with the situation, such as emergency credit, hardship funds or the write-off of some debt or long-term charges.
However, a period of high prices – which analysts say is likely to continue – means households have racked up a combined debt of £3.7bn to suppliers.
Households in arrears on average owed more than £1,500 on their electricity bills and more than £1,300 on their gas bills.
Charity National Energy Action said many people were already “limiting energy use” or running up debt to try to keep warm.
Adam Scorer, the company’s chief executive, said: “Targeted government support is vital to saving millions of people from the pain and danger of freezing their homes.”
Angela, from Liverpool, was one of those who fell behind on her bills.
As her mother’s carer, she told the BBC she had to make difficult choices.
“I owe (my energy supplier) over £1,000 so I haven’t switched on the gas and electricity,” she said. “We just sat there in our onesies and spent the evening. I thought it was terrible, it was a disgrace.”
Close to where she spoke was Katie’s Laundromat, a cooperative that provides affordable laundry and drying services to the community and free services to those in need.
Anthony Scott is part of the company’s operations team and sees dozens of clients every day, many of whom are struggling financially.
“I encounter a lot of anger, I feel a lot of anger. People are priced out of having energy in their homes,” he said.
The cap affects those on default, variable tariffs rather than those with fixed prices over a period of time.
Ofgem sets this every three months, but the regulator illustrates the change by showing the impact on a typical household’s annual bill for energy use.
To estimate the impact on an individual’s annual costs, bill payers can add 1.2% to their current bill.
