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HomeHousehold energy price rise of 5% comes into force

Household energy price rise of 5% comes into force

  • By Kevin Peachey
  • Journalist’s living expenses

image source, beautiful images

Residential energy price increases in England, Wales and Scotland have come into effect, putting further pressure on household budgets in the new year.

Higher price caps set by regulator Ofgem, from now until April, mean electricity and gas costs will be 5% higher than in the past three months.

A household using the usual amount of gas and electricity will see their annual bill increase by £94.

But forecasts suggest energy prices could plummet in the spring.

Campaigners say relatively high energy costs and other essential bills are putting heavy pressure on budgets. January tends to be the busiest month for charities managing debt after Christmas spending, and this year is likely to be the same.

The government said it is supporting households through financial support such as payment of living expenses.

Pay for what you use

The annual bill for a household using a typical amount of electricity and gas, paid by direct debit, has now increased from £1,834 to £1,928, energy regulator Ofgem said.

However, if you use more, you will pay more because the price per unit of energy is capped rather than the total bill.

Specifically in England, Wales and Scotland:

  • Gas prices are currently 7p per kilowatt hour (kWh) and electricity prices are 29p per kWh
  • Households using prepaid meters have seen their typical annual bill increase by £1,960
  • People who pay their bill every three months by cash or check now have a typical annual bill of £2,058
  • The standing charge – a fixed daily charge that covers the cost of connecting to the supply – remains unchanged at 53p a day for electricity and 30p a day for gas, although they vary by region

Prices and sectors are regulated differently in Northern Ireland. Households tend to pay less than the UK average but businesses pay more.

Ofgem said the amount of energy debt and arrears faced by electricity and gas customers rose to £2.9 billion between July and September.

Fuel poverty charity National Energy Action is calling on ministers to come up with a plan to help pay off debt, as well as social rebates for those on grants and energy efficiency schemes in the UK. home.

The latest energy price hike will affect about 29 million households. Of those, about 4 million have prepaid meters so they tend to pay for electricity when they use it.

That means some more vulnerable households using prepaid meters face particular pressure as prices have risen at the coldest and darkest time of the year.

image captions,

Winnie Baffoe said charities are working to help their communities

Winnie Baffoe is engagement director of the South London Mission, part of Bermondsey Central Hall Methodist Church, which provides charitable and council-funded support such as a warming center and food packages Products.

She said many families worry about food costs, have limited cooking facilities because of high energy costs and also worry about heating bills.

“It’s devastating because it takes away their ability to be a family in their home,” she said. “Here we have a lovely big hall and we’re finding the community is using it as a safe place, a place to meet other people but also a place just to keep warm.”

Last winter, energy prices were generally high and the rise could have been even bigger if the Government had not guaranteed energy prices capping typical bills at £2,500.

But millions of households will pay more for energy this winter than last winter, even though energy prices are higher than a year ago.

That’s because households received a £400 six-month rebate last winter, but this time the government-funded support has not been repeated.

The Government said it recognizes the challenges many people are facing and is providing support including £150. Warm home discounts and a living expenses payment of up to £900 for those receiving financial means benefits. Additional support is still being considered.

A Department for Energy Security spokesperson added: “We have invested more than £2bn in the Household Support Fund over the past two years – with almost £800m paid to families with children – and the current fund will run until March 2024.” .

Consulting firm Cornwall Insight said the sharp fall in wholesale prices facing suppliers could result in annual bills for households using a typical amount of energy falling from £268 to £ 1,660.

However, this is still just a forecast and international events can still impact prices.

What can I do if I can’t afford my energy bill?

  • Check your direct debit: Your monthly payment is based on your estimated energy usage for the year. Your provider may reduce your bill if your actual usage is less than estimated.
  • Pay what you can: If you can’t afford direct debits or quarterly payments, ask your supplier for a “payable plan” based on your means.
  • Claim what you are entitled to: Check you’re claiming all the benefits you can. Independence Money helper The site has a helpful guide.
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