The energy price cap has risen to the equivalent of £1,862 a year from Wednesday, pushing millions of households in Great Britain into fuel poverty as typical bills surge by more than £220 annually, according to campaigners.
Fuel poverty numbers soar
The End Fuel Poverty Coalition warned that the steepest summer rise in energy charges in four years will force 13.5 million homes to spend more than 10% of their income on energy bills, up from almost 11.3 million in April. Nearly 5.5 million households now face energy costs consuming about 20% of their income, sharply up from 4.3 million in April, based on research by the University of York.
Simon Francis, coordinator of the End Fuel Poverty Coalition, said: “These figures show the reality behind the headline price cap figure: a growing number of households are spending an unsustainable share of their income just to heat their homes in winter and keep them cool in summer.” He added that with energy costs rising over the summer, any chance households had to reduce debts or build reserves before winter will be wiped out.
New cap details
Under the new cap, electricity rates rise from 24.67p per kilowatt hour to 26.11p, and gas charges from 5.74p to 7.33p for households paying by direct debit. This translates to an annual dual fuel bill of £1,862 for a typical UK household under the previous methodology. Using new calculations assuming lower consumption, the regulator estimates the average household will spend £1,663 a year from July.
Energy analysts at Cornwall Insight predict bills will remain high as cooler months begin, with a greater impact as gas use increases. They forecast the average bill could be £1,654 from October, a 0.5% reduction from July.
Calls for government action
The surge has reignited calls for the government to address Britain’s energy affordability crisis. Unite union plans protests across the country demanding an immediate deep cut to energy costs and renationalisation of energy companies. Sharon Graham, Unite’s general secretary, said: “The increase in the energy cap is another kick in the teeth for workers and families who were already struggling with ever rising bills and the cost of living crisis. The UK has among the highest energy bills in Europe, they should be going down not up.”
Labour MP Andy Burnham, widely expected to be the next prime minister, used his first big public address on Monday to set out a long-term ambition for local leaders to have greater public control of essential services, including energy, to help curb the cost of living. Francis commented: “If it is to be Andy Burnham as the next PM with his vision of a rewired Britain, then new ministers must also rewire how energy bills are set. Plans to devolve control of energy will count for nothing unless they are accompanied by a permanent social tariff, an end to energy debt, reduction of electricity costs and a credible plan to break the link between gas and electricity prices.”
Martin McCluskey, minister for energy consumers, said: “We know families are deeply concerned about rising energy bills because of a war we did not choose, and we are determined to fight their corner to tackle energy affordability.” The government has removed some policy costs from home energy bills and expanded its warm home discount scheme to benefit 6 million households. McCluskey said it would continue to monitor the situation before winter and plan for all contingencies, while doubling down on the mission for clean power to bring down bills for good.
