Commenting on Ofgem announcing that the Energy Price Cap will be increasing by an eye-watering 80% to £3,549 a year for a household on typical usage*, Kevin Pratt, energy expert at Forbes Advisor, said: “Ofgem’s announcement that its cap will rocket to £3,549 – and £3,608 for homes on pre-payment meters – is no surprise, but it’s still a shock to see energy bills hitting a level just shy of three times what they were in March, when the cap was £1,271.
“The blunt truth is that monthly energy costs of nearly £300 a month are simply unaffordable for low and middle income families at a time when inflation across the economy is running at 10.1%. And as we know, there’s worse to come in January, when the cap is expected to hurtle past £4,200.
“With millions of households facing fuel poverty – when energy costs exceed 10% of disposable income – it is time for urgent government intervention in what is clearly a market in deep crisis. This needs to happen now, well in advance of winter, so that people avoid the prospect of not being able to heat their homes as temperatures drop.
“Whether the action takes the form of government-backed loans that would enable suppliers to freeze prices at today’s level, or the introduction of a subsidised social tariff for financially vulnerable households, it needs to happen before October and must be a priority for the new Prime Minister when he or she takes office on 5 September.
“In addition, we need a radical rethink of how we manage our energy needs on a national level. Wholesale gas prices won’t fall any time soon, so we need a long-term strategy to develop reliable and affordable alternatives, including nuclear power. And we need to make our housing stock, new and existing, more energy efficient so that we reduce consumption.”
*Ofgem’s average energy usage based on a household of 2.4 people uses 2,900 kWh of electricity and 12,000 kWh of gas. This works out at 242 kWh of electricity and 1,000 kWh of gas per month. Of course, this is just the average consumption for a household of between 2-3 people.