Millions of households in England, Scotland and Wales are facing higher gas and electricity costs this autumn after Ofgem raised its energy price cap by 2%. The change, which applies to variable tariffs, will see typical annual bills climb to £1,755 – about £35 more a year. Those on fixed deals will be unaffected. The regulator said the increase reflects additional costs in balancing supply and demand, as well as the funding of existing support schemes.
Industry body Energy UK has warned that more comprehensive, long-term help is urgently required, particularly for families in financial difficulty. It says current support is patchy and not well targeted, urging the government to create a permanent scheme that takes into account income, health and energy use. It estimates that £1.5bn a year could eliminate fuel poverty, cutting bills for affected households by an average of £400.
The rise comes at a time when household energy debt has hit record levels, with more than £4.4bn owed to suppliers. Ofgem is exploring the introduction of a Debt Relief Support Scheme to help households write off or manage unpayable debts, which could be funded either by government or spread across all customers’ bills.
Ministers have defended their approach, pointing to the Warm Home Discount worth £150 to one in five households and new investment in home insulation and cleaner energy. Pensioners on lower incomes will also receive winter fuel payments following a government u-turn on earlier plans to reduce support.
