Energy bills in the UK are set to rise again in January, with typical households facing an increase of £21 per year, bringing the annual cost to £1,738. This is the second price rise this winter, and energy bills have now surged by more than 50% compared to pre-Covid levels. Despite some relief from the Energy Price Guarantee, which limited bills in previous years, the costs are expected to remain high, and analysts predict that these elevated prices could become “the new normal.”
The cap set by the energy regulator, Ofgem, limits the cost per unit of gas and electricity but does not prevent overall bills from rising if energy use increases. The financial strain on households is significant, especially during the colder months when heating demands are higher. As a result, many people are forced to make difficult choices, including rationing their energy use or going into debt to keep warm. Currently, UK households collectively owe energy suppliers £3.7 billion, with the average arrears being over £1,500 for electricity and £1,300 for gas.
The government’s Winter Fuel Payment, which has provided financial relief for pensioners, is now only available to those on low incomes who receive certain benefits. Additionally, a reduction in the support for pensioners has led to concerns, as an estimated 50,000 pensioners may be pushed into relative poverty next year due to these cuts. Energy Secretary Ed Miliband acknowledged that high prices, influenced by global fossil fuel markets, are a continuing concern.
For many, the new energy price caps mean higher bills, with typical usage resulting in a bill of £1,738 annually from January 2025. While standing charges have slightly decreased, the overall impact on households remains significant, and the ongoing rise in energy costs has prompted charities and experts to highlight the continuing financial hardship faced by families, particularly those with children, elderly individuals, and people with disabilities.