Cost-of-living: energy price cap isn’t enough to help people save this winter
Last week Ofgem confirmed the price cap on the unit cost of gas and electricity to help ease household pressures this winter.
Announced on Friday last week, the new Ofgem price cap is due to commence on 1st October and will last until 31st December 2023. Experts from the organisation have claimed it could help households shave £250 off their yearly energy bill.
Due to the cap commencing, an annual energy bill for a household using a typical amount of gas and electricity will fall to £1,923 – bills will be £151 lower than current rates and £577 down on last winter.
The price cap is estimated to affected 29 million households in England, Wales, and Scotland. It sets the maximum amount that suppliers can charge for each unit of gas and electricity but not the total bill.
However, Mike Thornton, chief executive of Energy Saving Trust has claimed that this gesture may not be enough to save households from financial disaster.
Mike said: ‘Energy prices are still high, and we may see increases again this winter, so the message for government hasn’t changed. Addressing the root causes – not least our over-reliance on gas – to permanently lower energy prices is more important than ever.
‘A key priority must be to support individuals to use less energy in their homes and buildings to start with. The onus isn’t on households, it’s on government to shift the emphasis towards reducing energy demand – how much energy people are using and when.’
In addition, new figures released by the charity Citizens Advice highlight the long-lasting impact high energy bills are having on households.
Over 40,000 people with energy debts contacted the charity for advice in the first six months of 2023 – a 17% increase from the same period last year. These individuals were found to have debts averaging around £1,711 which is up a third on 2019.
In addition, Ofgem chief executive, Jonathan Brearley, said: ‘We know people are struggling with the wider cost-of-living challenges and I can’t offer any certainty that things will ease this winter.’
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