Energy bills set to be higher for millions of households this winter despite Ofgem lowering price cap
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Millions of households will see higher energy bills this winter, despite a fall in prices, according to new research by think tank Resolution Foundation. More than one in three households are expected to be hit by increased bills, despite Ofgem preparing to announce a lower energy price cap on Friday (August 25).
Typical annual energy bills are expected to fall from £2,100 last winter to around £1,925 this year, with the price drop being driven by falling wholesale gas prices. However, Resolution Foundation said the reduction in bills by almost £200 masks a wide variation for households.
As a result, more than 35% of English households, equivalent to 7.2 million homes , will see higher energy bills this winter than last. Of the poorest tenth of households in England almost half (47%) will face higher costs, according to the foundation.
They said: “Although the price per unit of energy is falling, this will be offset by a rise in the daily standing charge, and the fact that last winter’s universal £400 energy support is not being repeated. The UK remains slow on home energy efficiency, with rates of insulation delivered through government schemes falling by 45% in 2022 (on already poor 2021 levels).”
Currently, the government is offering cost of living payments totalling £900 during 2023-24, up from £650 last year, to around 8 million households. It comes as the UK has been criticised by many for lagging behind countries like France, the Netherlands and Finland when it comes to renewable energy investment.
Jonathan Marshall, senior economist at the Resolution Foundation, said: “In the longer term, the government needs to reduce the UK’s dependency on gas, and improve the state of our home insulation, to prevent the winter energy crisis from becoming an annual occurrence.”
The Resolution Foundation seeks to improve the living standards of low and middle-income families.