Households are facing an enormous 80 per cent rise in energy costs this October but what could it mean for bills in your area?
The rise in the energy cap announced by Ofgem on Friday (August 26) follows a 54 per cent jump in April, and a 12 per cent rise in the previous October. Charities are warning that 8.9 million households in the UK could be in fuel poverty this winter, with families no longer choosing between heating and eating, but unable to afford both.
Thomas Lawson, chief executive of national poverty charity Turn2us said: “Today’s meteoric rise in the energy cap will cripple those of us in the UK already struggling to stay afloat. This is no longer a choice between heating and eating, but not being able to afford either. This is as big an emergency as the impact of Covid and needs a similarly confident government response.”
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He implored the government to act with urgency and introduce a cap on energy costs that means people can heat their homes and turn on the lights this winter, and to increase Universal Credit and legacy benefits by a minimum of £25 a week.
The cap doesn’t take into account current government support for consumers, which will bring bills down a bit. All households with a domestic electricity connection in Britain will get £400 off their bills in October, while there will be more help, up to £1,200, for those on low incomes, pensioners, and those with disabilities.
Based on the latest announcement, the average bill for a customer paying by direct debit will be £3,549 a year. That will have risen from £1,138 a year in April 2021, to £1,277 a year in October last year, and is up from £1,971 a year from April this year.
Prepayment customers have seen an increase from £1,156 in April 2021, to £2,017 in April this year, with prices going up to £3,608 this October. However, energy use varies across the country, meaning if your consumption is similar to the local average you could be facing bigger bills than those in other parts of the country.
In Bristol, households will see energy bills rise from an average of £1,881 over the summer to £3,330 between October and December, a difference of £1,449. This is based on median gas consumption of 10,707 kWh and median electricity consumption of 2,792 kWh per year.
Breaking it down into Bristol's neighbourhoods, Stoke Bishop will see the highest change from summer energy bills to the looming changes from October to December, with a rise of £2,258.
| Neighbourhood | Gas medium | Electric medium | Bill winter '21 | Bill summer '22 | Bill Oct-Dec '22 | Change summer-Dec '22 |
Stoke Bishop |
18,562 |
3,779 |
£1,785 |
£2,749 |
£5,007 |
£2,258 |
Westbury on Trym |
17,288 |
3,529 |
£1,677 |
£2,583 |
£4,689 |
£2,106 |
Henleaze |
17,526 |
3,401 |
£1,659 |
£2,564 |
£4,658 |
£2,094 |
Westbury Park |
15,756 |
3,439 |
£1,593 |
£2,443 |
£4,415 |
£1,972 |
Westbury Village |
13,586 |
3,147 |
£1,439 |
£2,198 |
£3,941 |
£1,744 |
Redland & St Andrew's |
13,150 |
2,917 |
£1,371 |
£2,100 |
£3,758 |
£1,658 |
Knowle Park |
12,838 |
2,956 |
£1,366 |
£2,087 |
£3,731 |
£1,644 |
Whitchurch Park |
11,663 |
3,104 |
£1,349 |
£2,042 |
£3,633 |
£1,592 |
Bishopston |
12,454 |
2,861 |
£1,330 |
£2,032 |
£3,625 |
£1,594 |
The medium gas consumption and medium electricity consumption are both measured in kWh and taken from 2020. Figures are based on local average domestic usage according to Department for Business, Energy & Industrial Strategy, and Ofgem’s price cap figures for customers paying by direct debit. Just as local usage varies, so does the price cap, with people in some areas facing a higher cap based on the cost of transporting energy to them.
Previously, regulator Ofgem has set the cap twice a year for summer (between April and September), and winter (between October and March). From October this year, it will start setting it quarterly, so the next change will be in January.
Jonathan Brearley, CEO of Ofgem, said: “We know the massive impact this price cap increase will have on households across Britain and the difficult decisions consumers will now have to make. I talk to customers regularly and I know that today’s news will be very worrying for many.
“The Government support package is delivering help right now, but it’s clear the new Prime Minister will need to act further to tackle the impact of the price rises that are coming in October and next year.”
Looking ahead analysts Cornwall Insight is forecasting that prices will rise from £3,549 in October to £5,387 in January, a 52% increase, and then to £6,616 in April, up another 23 per cent. That would take the average monthly bill from £296 in October (already up from £164) to £449 in January and £551 in April.
The energy cap is based on the costs energy suppliers face. Primarily, this is the wholesale cost of gas and electricity, which has soared in recent months. Chancellor Nadhim Zahawi has said the government was “working flat out” to develop a new package of support for consumers.
He said: “This will mean the incoming Prime Minister can hit the ground running and deliver support to those who need it most, as soon as possible.”
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