Ahead of Chancellor Jeremy Hunt’s Spring Budget on March 15, energy experts at Forbes Advisor have looked at how much more running essential and popular household items could cost people from next month - if the UK Government increases the £2,500 Energy Price Guarantee (EPG) to £3,000 as planned.
There is widespread speculation that a campaign led by consumer Champion, Martin Lewis, to freeze the EPG at £2,500 until July is going to be announced on Wednesday. The open letter to the Chancellor has been backed by over 110 charities and organisations, however, Secretary of State for Energy, Grant Shapps MP, wouldn’t commit to an answer when appeared on the Martin Lewis Money Show Live last week - which prompted the financial journalist to respond he is now “99 per cent certain” the hike will not go ahead on April 1.
However, if the Chancellor decides the 20 per cent increase will go ahead, the cost of doing a single load of laundry could go up from 71p to 86p.
Kevin Pratt, energy spokesperson at Forbes Advisor, said: “It’s been a tough winter for households across the UK, even with the Energy Price Guarantee in place and the £400 rebate paid to most households in monthly instalments between October and March.
“If there is no change to current policy, the 20 per cent rise in the Energy Price Guarantee will prove a hammer blow to household budgets - and this can clearly be seen by looking at the impact on the cost of running gas and electric appliances.
“For example, applying a 20 per cent increase on bills would mean the effective cost of running a fridge would rise from £2.45 a day to £2.95, while one load of washing would set you back 86p, up from 71p.”
Kevin explained that on their own, some of these increases might not sound a lot, but over a month it soon adds up.
He said: “It’s important people are aware of these potential changes in their bills from April, but we hope the government uses its Budget on 15 March to share news of continued support on energy bills.”
The Martin Lewis campaign proposes freeing the EPG until July, when we might see energy bills start to fall thanks to reductions in the price of natural gas on wholesale markets. The Ofgem price cap - currently not applied since it is higher than the EPG is forecast by analysts at Cornwall Insight to fall at that point to £2,112, taking it below the EPG, even if it is frozen at £2,500.
This is when we might also see energy companies reintroduce competitive fixed rate tariffs and encourage customers to switch - this isn’t happening at the moment because there are no deals available below the level of the £,2500 EPG.
How much items will add to your energy bills
The items listed below show the current cost to run and how much it will cost from April, if the EPG rises to £3,000.
- Electric car - £19.04 (£22.96 from April)
- Radiator/Heating (gas) - £15 (£24 from April)
- Plug-in electric heater - £3.06 (£3.69 from April)
- Fridge - £2.45 (£2.95 from April)
- Hot Tub - £1.36 (£1.64 from April)
- Tumble Dryer - £1.02 (£1.23 from April)
- Dishwasher - £0.92 (£1.11 from April)
- Washing machine - £0.71 (£0.86 from April)
- Electric oven (fan assisted) - £0.85 (£1.03 from April)
- Electric oven - £0.71 (£0.86 from April)
- Air Fryer - £0.51 (£0.62 from April)
- Slow cooker - £0.44 (£0.53 from April)
- Electric Hob - £0.34 (from £0.41)
- Hairdryer - £0.31 (£0.37 from April)
- Games console - £0.27 (£0.33 from April)
- Full kettle - £0.26 (£0.31 from April)
- Vacuum cleaner - £0.24 (£0.29 from April)
- 75 inch LCD TV - £0.24 (£0.29 from April)
- 32 inch LCD TV - £0.21 (£0.25 from April)
- Electric blanket - £0.20 (£0.25 from April)
- Iron - £0.19 (£0.23 from April)
- Lawnmower - £0.17 (£0.21 from April)
- Laptop - £0.12 (£0.14 from April)
- Microwave - £0.09 (£0.10 from April)
- Gas Hob - £0.08 (£0.12 from April)
- WiFi router - £0.04 (£0.05 from April)
- Peloton - £0.02 (no change)
Forbes Advisor looked at the cost per use of essential and popular household items and compared running costs under the Energy Price Guarantee in place October 2022 - March 2023 inclusive, to running costs under the increased Energy Price Guarantee to £3,000.
Chancellor Jeremy Hunt will deliver the Spring Statement on Wednesday, March 15 in the House of Commons.
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