Auto Amazon Links: No products found.
Millions of households are facing a significant increase in their energy bills this winter, reaching the highest levels seen in three years. This rise will be a result of a price cap adjustment set to be announced by the industry regulator, Ofgem, scheduled for Wednesday. The new cap will take into account the increased wholesale cost of gas, which suppliers bear, and will coincide with the arrival of colder weather between October and December.
Experts anticipate that Ofgem will confirm a 4% increase in prices compared to the current cap, impacting those on variable tariffs across England, Scotland, and Wales. Energy companies have reported a substantial growth in energy debt and warned that high bills are likely to continue. They are therefore urging for additional support to be provided to households struggling to meet these costs. Meanwhile, the government has announced a reduction of VAT on electricity bills as a measure to help ease the burden.
The forthcoming price cap change will affect approximately 33 million households and is largely influenced by fluctuations in international wholesale gas prices. According to Energy UK, the trade body representing suppliers, the average price of gas has surged by 61% over the past three months compared to late 2025. Many customers have opted for fixed-rate energy tariffs to avoid uncertainty, especially amid geopolitical tensions such as the US-Israeli conflict with Iran. Those on fixed deals, accounting for around 40% of consumers, will be shielded from these increases until their tariffs expire.
Since Russia’s full-scale invasion of Ukraine in 2022 triggered the ongoing energy crisis, households have been paying about 70% more on their bills compared to pre-crisis levels. This sharp rise has led to a surge in unpaid debts, with Energy UK estimating total consumer energy debt has reached £6 billion and could grow to £7 billion by the end of the year. The average debt for those without a repayment plan is around £3,500. In response, the trade body has proposed a flexible discounted tariff funded by taxation to assist the most vulnerable, an idea supported by many charities addressing debt. Emily Whitford from StepChange emphasized the urgent need for measures like a national social tariff and a debt write-off scheme, warning that without such interventions, energy debt and demand for assistance will continue to rise. Additionally, the Trades Union Congress has called for a windfall tax on bank profits to help lower energy costs.
The government has taken some steps to alleviate pressures, including an October VAT cut on electricity bills, which is expected to reduce annual costs by about £50 on average. Some policy costs were either canceled or deferred earlier in the year, yet officials admit more action is needed. Energy suppliers provide various support programs for consumers facing payment difficulties, but Energy UK highlights that help is often contingent on customers proactively contacting their suppliers to communicate their challenges
Read the full article from The BBC here: Read More
Auto Amazon Links: No products found.