Energy bills set to rise by 5% in January
Millions of households face a tough winter ahead with energy bills set to rise from the beginning of January.
According to a forecast from industry experts Cornwall Insights, Ofgem will announce an energy price increase to 28.94p per unit of electricity and 7.42 per unit of gas next Thursday.
The price hike, which’ll come into effect at the start of next year, means that the typical household’s bill will rise from £1,834 per year to £1,931 – an increase of 5%.
The forecasts are based on the wholesale market prices for gas and electricity, which have climbed again in recent weeks after the start of the Israel-Hamas war last month.
Craig Lowery, consultant at Cornwall Insights, said: “An unstable wholesale energy market, coupled with the UK’s reliance on energy imports, makes it inevitable that energy bills will rise from current levels. This leaves households facing yet another winter with bills hundreds of pounds higher than pre-pandemic levels, and affordable fixed deals few and far between.’
The rise in energy prices will mean households could face far higher charges this winter than last because government support has been withdrawn and standing charges have increased.
Standing charges are what suppliers add to bills as a flat daily fee - a bit like line rental for a phone – to cover the cost of connecting households to their energy supplier. That means that this winter households won’t have the option to keep energy bills low by not turning on the heating, with lots of prepayment meter top ups already being eaten up by standing charges.
This week, Ofgem opened a review into standing charges, which for some households have doubled over the past two years. From 1 October, the amount these charges added to a typical dual fuel bill rose to above £300 a year, penalising low-income households.
We’re already seeing a huge increase in the number of people contacting us for help with energy debt. If you’re heading into winter already in energy debt or are worried about how you’ll afford to pay energy bills this winter, get in touch and we might be able to help.
Energy grants to help with bills
Worried about how you’ll pay your heating bills this year? You’re not alone - around 60% of people who got in touch with us last month were in arrears with their utility providers and couldn’t afford to pay them.
While there’s no government help this year, a number of the largest energy providers are offering support to help low-income households make it through the winter. Here’s some of the schemes on offer:
British Gas is offering the UK’s biggest ever energy support package with £100 million worth of help available to customers facing financial hardship.
Opening for applications from 2 October, you’ll be able to get:
- Grants of up £1,500 aimed at customers struggling to pay bills
- £250 of non-repayable credit for those on repayment meters
- Debt write off for customers who have no reasonable means to repay
While the support package is only available to eligible customers, the energy giant also provides financial support to everyone – regardless of your supplier – through the British Gas Energy Trust. Help available includes debt relief grants, emergency small energy grants and access to a network of 45 funded money and energy advice centres.
Visit www.britishgasenergytrust.org.uk for details of what’s available to you.
Shell Energy has confirmed they’ll price match the £150 customers receive from the Warm Home Discount, meaning you’ll get £300 towards your bill in total.
You don’t need to do anything to get the extra money. If you get help from the Warm House Discount, Shell will automatically apply it to your account.
However, you’ll only be eligible if you joined Shell on or after 22 August 2022 otherwise your previous supplier will be responsible for your Warm Home Discount.
Through its Winter Affordability Support Scheme, E.ON Next is offering a raft of measures to help vulnerable customers from now until the end of winter in March 2024, including:
- 25% off standard variable prices for customers with no existing debt
- 50% off standard variable prices for customers with existing energy debt who sign up to the support scheme. Customers debt will be written off at the end of the term if they keep on top of payments.
- The E.ON Next Pledge tariff which tracks the price cap and will remain £50 below the cap
- Free insulation through the Great British Insulation Scheme
- E.ON Energy Fund offering emergency top ups
To be eligible for help, you must be an existing E.ON Next customer with a household income of less than £19,00 a year. Customers with certain medical dependency needs with household incomes under £31,000 will also be able to apply for help.
E.ON Next energy specialists will start contacting eligible customers via post, text, email and phone from this week.
Standing charges have rocketed by 55% since April 2021. As part of its £40 million support package, EDF has committed to rolling back the price of standing charges to their April 2021 levels for its most vulnerable customers.
Around 260,000 customers claiming Warm Homes Discount will be eligible for the roll back, which will be applied to your account as a £30 credit in December.
They’re also offering some customers a ‘fresh start’ by clearing their debt alongside payment matching top-ups for households on pre-payment meters.
OVO is offering a range of free financial and practical support including smart thermostats to control the temperature of rooms, as well as electric throws and boiler servicing.
The support package – worth nearly £40 million – is open for applications from 16 October.
To get help from the package, you need to be a customer of either OVO Energy, Boost or SSE energy Services and complete an online application.
You’ll need to have information, such as your monthly disposable income and up to date meter readings, to hand. They’re only accepting your first application so it’s essential that all the information you provide is accurate.
According to Octopus Energy, it costs £4 a day to heat a whole house but somewhere between 2-4p to heat a person. Therefore, the energy challenger is offering 10,000 free electric blankets to eligible customers.
They’re asking customers who can afford it, to buy one for themselves but will cover the cost for vulnerable customers such the elderly, those with mobility issues or other medical conditions who are impacted more by the cold.
The offer is limited to one blanket per household.
The UW Hardship Fund is offering financial assistance for eligible customers, as well as advice on budget planning, benefit entitlement support and efficient energy advice.
To find out what’s available to you call 0333 777 3215.
Caroline has worked in financial communications for more than 10 years, writing content on subjects such as pensions, mortgages, loans and credit cards, as well as stockbroking and investment advice.
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