Gas and electricity bills are likely to soar in October and again in January. Image: Unsplash
Energy bills could soar above £4,200 from January, according to new price cap estimates. That’s more than triple the amount the average person paid earlier this year.
Consultancy Cornwall Insight revealed the cap on energy bills is expected to rise to £3,582.02 this October. In January, the cap is set to soar again to £4,266.48.
Experts and campaigners have said these predictions are “terrifying” for low-income households, urging the government to take immediate action.
Earlier this year, the energy price cap was £1,277. Ofgem increased the cap by £693 in April, a rise of 54 per cent. Jonathan Brearley, chief executive of Ofgem, said the increase was a response to the “unprecedented increase in global gas prices”.
Martin Lewis said on Twitter: “Tragic news.” He explained the predictions mean there will be an 81 per cent price cap rise in October, and a further 19 per cent increase in January. He added: “Action and planning is needed now. The zombie govt needs to wake up sooner than September 5.”
Peter Matejic, chief analyst at the Joseph Rowntree Foundation (JRF) said: “The latest projections of annual energy bills exceeding £4200 from January is the latest in a series of terrifying warnings over the past week, from the Bank of England and others. Families on low incomes cannot afford these eye watering sums and as a nation we can’t afford to ignore an impending disaster.”
Chris Birt, of the JRF, added: “Energy is the cost of life, not just living. Without heat and light we are lost. Any government that can sit idly by while households face a £4,200 bill is not worthy of the name. Action, and radical action, is needed now.”
It comes as the JRF warns that the government’s support package is only half of what is needed to cover the rise in the cost of living. Using the previous forecasts, the thinktank had predicted a rise of £2,500 in living costs by April 2023. The new estimates from Cornwall Insight mean that figure is likely to be even higher.
The government has pledged to support low-income households with a cost of living support package of £1,200 – but households will need more than double that to cover the extra costs they will face this year.
Rachelle Earwarker, economist at the JRF, said: “This is terrifying. Millions of people cannot afford this, there’s nothing left to cut back on. Using previous forecasts, we calculated that low income households would face increased costs of £2,500 to April 2023. That’s now higher again. Cost of living support urgently needs doubling, now.”
Labour MP Matthew Pennycook also took to Twitter to share his fears over the new forecasts. “As the Tory leadership candidates continue to dangle carrots before their party members,” he said, “this is the calamity facing millions of families this winter. The government must act now.”
Emma Jackson, of Christians Against Poverty, agreed. She said: “We cannot continue down this path of debt, destitution and death,” calling on the leadership candidates and the chancellor Nadhim Zahawi to take immediate action.
Energy Action Scotland tweeted: “Inexorable, ever increasing predictions. UK Gov paralysed on the sidelines, denying the scale of the human catastrophe ahead of us. Wait and see followed by one off interventions are simply not good enough. People deserve better.”
Public fury is growing as the cost of living crisis spirals, with a new campaign Enough is Enough launched yesterday by leading public figures and organisations to fight the cost of living crisis. They claim 100,000 people have already joined the campaign in the first 24 hours.
As an immediate measure, the campaigners want the October price hike cancelled and the pre-April price cap of £1,277 per year restored.
Labour MP Zarah Sultana said: “For a real pay rise, to slash energy bills, to end fuel poverty, for decent homes for all, and to finally tax the rich and big business – this is what Enough Is Enough stands for. It’s all about one political choice – your need or their greed. It’s time to channel anger into action.”
Enough is Enough tweeted this morning: “Today it’s been revealed that the energy price cap is set to rise to £4,266 in January. We’re not going to accept corporations making record profits from the misery of millions. It’s time to build a campaign to fight back.”
If you are struggling with your bills, there are places you can go to get support:
Charitable grants offer financial support to people who are struggling – and the money doesn’t need to be paid back. You can find out what grants might be available to you using Turn2Us’ grant search. Turn2Us helps people to access grants and support services if they’re in financial difficulty. If you contact them, they’ll check what’s available to you.
Local councils may be able to give you debt advice, help you get hold of furniture, support you through food and fuel poverty. There are local welfare assistance schemes, also known as crisis support. Find out what support your council offers through End Furniture Poverty’s local welfare assistance finder.
Scottish Welfare Fund is offered in Scotland to provide a safety net for people on low incomes. These include crisis grants and community care grants.
YoungMinds offers support for young people struggling with their mental health.
Citizens Advice offers information and services to help people who are struggling with a range of issues such as the cost of living. Contact your local Citizens Advice for help. They can also advise you as to what financial support is available from the government to help you with the cost of childcare.
Food banks support people who cannot afford the essentials. Many food banks are run by the Trussell Trust and you can find your local one on their website. For advice and support you can also call one of the charity’s national helplines.
If you can't visit your local vendor on a regular basis, then the next best way to support them is with a subscription to the Big Issue. As a social enterprise, we invest every penny we make back into the organisation. That means that with every subscription, we are supporting people in poverty to get back on their own two feet.