UK households numbering in the millions are bracing for a sharp rise in energy bills this winter, as concerns intensify among industry leaders and charities who urge the government to act swiftly to prevent a worsening crisis.
Urgent appeals follow latest energy price hikes
Immediate intervention from the government is being urged by Energy UK, the primary trade body representing energy suppliers, as forecast data and current price surges signal further consumer hardships caused by escalating gas and electricity tariffs. The association warns that neglecting prompt action could leave the country contending with a crisis more profound and costly than before.
On Thursday, Ofgem increased its price cap—which limits the maximum charges for households on variable tariffs—by 4%. This adjustment results in households having to pay about £5 extra monthly or £60 more each year, with the average annual bill reaching £1,723 for direct debit customers. This update impacts approximately 20 million homes on variable tariffs in England, Scotland, and Wales.
Forecasts point to more increases ahead
The outlook for the coming months remains bleak, as numbers released earlier this week indicate that energy bills are forecast to jump by 16% in January. Research by the independent consultancy Cornwall Insight predicts that next year, the typical dual-fuel bill could soar to £1,999, representing the greatest rise seen in four years.
The government recently lowered VAT on electricity bills and continues to redirect some levies to general taxation as relief strategies. However, Energy UK emphasises that these gains have been wiped out by a leap in wholesale costs, with contributing factors including global instability, persistent conflict in the Middle East, and shipping disruptions through the Strait of Hormuz—on top of the continuing repercussions of Russia’s invasion of Ukraine in 2022—all fueling the rise in energy prices.
“Waiting for another crisis of that scale is not an option,” cautioned Dhara Vyas, chief executive of Energy UK. She underscored that the issue of customer debt is intensifying, now adding an average of £67 a year onto each household bill.
Warnings from the sector and non-profits
The call for government action was reinforced by Simone Rossi, CEO of EDF Energy, who warned of the UK “walking into a second energy crisis.” Echoing this, Vyas insisted that decisive and focused action should come before further rate increases, noting that reactive, last-minute measures are often less effective and more costly.
Energy UK has proposed several steps for the government, such as:
- Augmenting support alongside the current £150 Warm Home Discount for people on benefits, with a long-term proposal for a discounted social tariff
- Introducing a new debt relief initiative targeted at households most at risk, designed to prevent new tenants and homeowners from falling into energy debt
- Removing additional levies from electricity bills with their costs absorbed by taxation, thereby supporting wider goals of electrification
Charitable organizations are also stepping up, with Adam Scorer, chief executive of National Energy, telling BBC Breakfast that “[The increase in debt] is not more people getting into debt, that’s more poor people getting into more serious levels of debt.” He warned that adequate government assistance is crucial or else vulnerable households will continue to be trapped in hardship.
Prime Minister Andy Burnham responded by confirming at last week’s Labour Party conference that comprehensive options are under review to relieve households, stating authorities are “looking at any measure that can give people breathing space, that can take the pressure off.”
Uncertainty remains for households as winter approaches
With rising energy costs and the arrival of colder weather, the likelihood of another, deeper energy crisis grows. The combined voices of industry leaders and anti-poverty advocates are increasing the urgency for the government to introduce targeted measures that will offer meaningful protection for households struggling with escalating costs.