Great Britain’s energy price cap has fallen below £2,000 a year for the first time in 18 months but consumer groups have warned that households will feel little relief from high energy costs this winter.
Households can expect to pay an average of £1,923 a year from October after the energy regulator dropped the price cap from £2,074 in the previous quarter.
The average household will still pay almost double the rate for their gas and electricity than before Russia’s invasion of Ukraine triggered a global energy crisis. Plus, bill payers will not have the benefit of the £400 payment from the government given to all homes last winter.
Ofgem has trimmed the price cap, which sets the maximum rate that suppliers can charge households every three months, because of a recent fall in gas and electricity market prices. The new rate will apply from October through to December before it is adjusted again in January.
The fall could be temporary: the price cap is expected to rise again to £2,082 a year from January, according to forecasts from the energy consultants Cornwall Insight.
Ofgem has produced two numbers for the new price cap after changing how it calculates the typical energy bill. The £1,923 figure is comparable with the previous quarter. However, from now on, Ofgem’s cap assumes households will use 7% less electricity and 4% less gas than in previous years, meaning a lower cap of £1,834 when expressed as an annual dual-fuel energy bill for direct debit customers.
Consumer groups have urged households to pay attention to the cap on unit rates for gas and electricity instead of the average annual bill. Under the new cap the price of electricity has fallen to 27.4p a kilowatt-hour, from 30p a kWh previously, while the unit price for gas has fallen from 7.5p a kWh of gas to 6.9p/kWh.
The average standing charge – a fixed charge levied on all households regardless of how much gas or electricity they use – has risen from just under £250 a year in October 2020 to almost £300 a year.
Jonathan Brearley, Ofgem’s chief executive, said: “It is welcome news that the price cap continues to fall; however, 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.”
Gillian Cooper, the head of energy policy at Citizens Advice, said: “Increasing numbers of people we help are in a negative budget, where they simply don’t have enough money coming in to cover even just their essential bills. The next few months will push households like these over the edge. Our data suggests it will be as bad, if not worse, than last winter.
“Government must step in quickly with more targeted support for the households who need it most.
The energy cost crisis has fuelled calls from across Westminster and the energy industry for government ministers to do more to help vulnerable households pay their energy bills by setting a “social tariff”.
The government promised to consider legislation that would offer a tariff at well below the market rate but in a recent consultation on energy market reforms a social tariff was not included.
The government offered all bill payers a £400 one-off payment through its energy bills support scheme last winter. For the winter ahead the government will offer targeted support, including a £900 payment for those on means-tested benefits, £300 for pensioners and an extra £150 for disabled people.
Simon Francis, the coordinator of the End Fuel Poverty Coalition, said: “The government seems to be running out of enthusiasm to help people get through the energy bills crisis, and it is also now running out of time to act to keep people warm this winter.”
https://news.google.com/rss/articles/CBMibmh0dHBzOi8vd3d3LnRoZWd1YXJkaWFuLmNvbS9tb25leS8yMDIzL2F1Zy8yNS9vZmdlbS1lbmVyZ3ktcHJpY2UtY2FwLWZhbGxzLWJ1dC1jb25zdW1lcnMtc3RpbGwtZmFjZS1oaWdoLWJpbGxz0gFuaHR0cHM6Ly9hbXAudGhlZ3VhcmRpYW4uY29tL21vbmV5LzIwMjMvYXVnLzI1L29mZ2VtLWVuZXJneS1wcmljZS1jYXAtZmFsbHMtYnV0LWNvbnN1bWVycy1zdGlsbC1mYWNlLWhpZ2gtYmlsbHM?oc=5
2023-08-25 07:00:00Z
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