As of January, energy bills for the typical household are set to rise once again, with prices expected to remain high for the foreseeable future. Someone paying for both gas and electricity through direct debit will pay a yearly amount of £1,738, which is £21 more than last year during pre-Covid times. Even with many people already struggling, the regulator Ofgem has confirmed similar levels of prices now present for the rest of Winter. The quarterly cap on the unit of energy has an impact on 26 million households based in Scotland, England, and Wales and will likely struggle to pay their bills or survive without heating during the coldest months of the year.
While the capped energy unit cost has increased by 1.2%, this year’s overall cost is 10% less than last year’s prices. However, Ofgem still expects many people to find themselves stretched thin by high energy costs. Tim Jarvis, a regulatory member, suggested checking all the offers available to bring the cost of energy down with the ever-expanding market for choices.
The costs of every unit of gas and electricity are capped, but the overall bill is not. A long and cold winter may increase energy usage and run up bills that many people may find impossible to pay. Energy companies are offering support, such as emergency credit, hardship funds, or writing off some debts or standing charges. National Energy Action, a charity, has pointed out that many people are already struggling to ration their usage of energy and have built up widespread debt to remain warm during the colder months of the year.
One lady, Angela, caring for her mother in Liverpool, told the BBC that she is over £1000 behind on energy bills. She has stopped turning on her gas and electricity and remains in her pajamas, feeling disheartened by the situation. It is not just the public taking the brunt of the price hike, as many use energy co-operatives like Kitty’s Laundrette. Anthony Scott commented on how many people are outraged at being forced out of their homes due to the constant rise of energy prices.
The price cap does not impact those who have paid for a set price for a defined period. The cap is recalculated once every three months by Ofgem. Such adjustments typically illustrate the impact on an annual bill for households using a standard amount of power and gas. Billpayers can determine the impact of the current pricing by adding 1.2% of their current bill. Those without means-tested benefits or low-incomes are now without any supporting payments as of February 2021, which may cause some households to feel the squeeze. Though previously, winter fuel payment was universal, it is now solely available to low-income individuals who receive select benefits
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