If the existing price rises weren’t already enough, the average British household energy bill is estimated to surge above £5,000 per year in 2023, according to analysts at independent energy consultancy, Auxilione1. They predict that Ofgem will likely raise the price cap for the average UK household to the £5,000 mark from April next year1.
With summer giving way to autumn soon, the impact of weather changes and the consequent increased use of electricity and gas will soon make themselves felt. We are facing a situation where there is a genuine concern as to how many households will cope with the increased burden. Fuel poverty is recognised to be where a family is spending more than 10% of its household budget on energy2 and using those metrics, it means that two thirds of the country could be pushed into fuel poverty in 20233.
Regardless of whether you feel your household will be able to weather the storm after such a long period of price stability, there is no doubt that the feelings of shock and anger are not helped by stories of the record profits being made by the large energy suppliers, though some of those reports refer to oil companies and those providing petrol and diesel at the pump4.
Some of the anger has been redirected into trying to create a mass movement to force providers to lower their prices. Don’t Pay UK, a grassroots organisation is encouraging energy customers to stop paying for their energy on 1st October. This is the date when the new energy price cap will take effect. Their idea is to create a group, the larger the better, which would all cancel the direct debit arrangements with their providers at the same time. The aim being to make the providers rethink their pricing with the threat of mass non-payment as a bargaining position.
While it might seem to be a justifiable position, the effects of non-payment can be serious.
If any of the above happened, it could mean you might struggle to get good rates on loans and credit cards or even be refused, which in turn would mean struggling to rent a property or obtain a mortgage.
While it is unlikely that your supply would be cut off, one of the best ways to manage your energy bills in the event of hardship is, rather than taking direct action, is to talk to your supplier.
If you believe you may have challenges paying your energy bills this Winter, there is more information about any discounts and payments that you may be entitled to on the UK Government website. Visit https://www.gov.uk/government/news/400-energy-bills-discount-to-support-households-this-winter to find out more.
Sources
1 – Sheppard, D & Parker, G. (2022) British energy bills forecast to soar above £5,000 next year. Available via Google search or direct FT subscriber link at: https://www.ft.com/content/048c0271-75d3-4d4e-9a00-e8fd0bf62691 (Accessed 22nd August 2022)
2 – Turn 2 Us (2022) Fuel Poverty – What is Fuel Poverty?. Available at: https://www.turn2us.org.uk/Benefit-guides/Fuel-Poverty/What-is-fuel-poverty (Accessed 22nd August 2022)
3 – Crerar, P. (2022) Two-thirds of UK families could be in fuel poverty by January, research finds. Available at: https://www.theguardian.com/society/2022/aug/17/two-thirds-of-uk-families-could-be-in-fuel-poverty-by-january-research-finds (Accessed 22nd August 2022)
4 – Demianyk, G. (2022) Why Are Energy Bills Rising When Suppliers Are Making Record Profits?. Available at: https://www.huffingtonpost.co.uk/entry/energy-prices-rising-suppliers-record-profits_uk_62f41502e4b0ab35e0afbcb7 (Accessed 22nd August 2022)
