Millions of households to pay higher energy bills this winter than 2022 despite price cap set to fall
Millions of households in England will see higher energy bills this winter than they did last winter
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Millions of households in England will see higher energy bills this winter than they did last winter, with almost half (47 per cent) of those affected being in the poorest tenth of households, according to new research.
More than one in three (35 per cent) English households, equivalent 7.2 million households, are set to see the increase, the Resolution Foundation has warned today.
The expected rise comes despite the Ofgem energy price cap predicted to fall from October.
However, the expected headline reduction in bills masks wide variation for households, the Resolution Foundation has warned.
The price cap was set at £2,074 a year for a typical household on a 'dual fuel tariff' and paying by direct debit from July 1
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Ofgem, which will announce the new price cap tomorrow, is expected to announce the price cap on a like-for-like basis will fall by seven percentage points to around £1,925 from October 1, according to a Cornwall Insight forecast.
The price cap was set at £2,074 a year for a typical household on a 'dual fuel tariff' and paying by direct debit from July 1.
The leading forecaster said the cap will also appear lower from October at £1,823 because Ofgem has changed how it calculates the average energy bill.
Jonathan Marshall, senior economist at the Resolution Foundation, said: “Ofgem is set to announce that the typical household energy bill will fall this winter, but more than one-in-three households across England will be shocked to discover that their energy bills could actually be higher this winter than last winter.
“This increase will be particularly acute for England’s poorest families, a quarter of whom will spend at least £100 more on energy bills this winter compared to last year.”
The think tank has warned that the rise in the daily standing charge and the fact the £400 energy bills support scheme will not be repeated will offset a fall in the price cap.
Mr Marshall said: “With these energy bill increases coming on top of a prolonged period of fast-rising food and housing costs, the cost of living squeeze is far from over.
“And, although Government schemes have improved their targeting of support throughout the crisis to those most in need, significant gaps remain which should be urgently addressed to help the most vulnerable get through the challenging months ahead.
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The April to June 2023 price cap was £3,280 but customers were protected by the £2,500 energy price guarantee
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“In the longer term, the Government needs to reduce the UK’s dependency on gas, and improve the state of our home insulation, to prevent the winter energy crisis from becoming an annual occurrence.”
The April to June 2023 price cap was £3,280 but households on typical use paid £2,500 under the government’s energy price guarantee.
The price cap figures do not mean customers cannot pay more than this amount for their energy bills.
The amount people pay depends on actual household usage as well as meter and payment type.
The aforementioned figures are based on people paying direct debit on a standard variable tariff, known as a default tariff.
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