Energy bills soar by 54% after February’s price cap rise

The increase, which will begin in April 2022, will mean 6.5 million UK households could be in fuel poverty

On 3 February 2022 Ofgem announced the price cap rises, which will take place in April 2022.

• The energy regulator Ofgem confirmed ‘average’ domestic energy bills for Direct Debit and Standard Credit customers across Britain could soon reach £1971, an increase of over 54%. 
• Those in the least efficient homes (especially the poorest) will be hit even harder. The mammoth rises are even higher for over 4.5 million customers on prepayment meters, up to £2,017, an increase of over £708 compared to bills today.
• We estimate the cost of heating an average home will have doubled in 18 months. Plus the number of households in fuel poverty will also soar from 4 million to 6.5 million across UK in six months from October 2021 to April 2022. 

For more background on the energy crisis see our page https://www.nea.org.uk/energy-crisis/

Government’s plans – ‘heat now, pay later’ and Council Tax rebates

• The UK Government announced a new GB-wide ‘rebate and clawback’ scheme with energy suppliers provided with loans to provide rebates in October of £200 to each household which will need to be paid back over five years. 
• Council Tax payers in bands A to D will also receive a rebate of £150 from their bills in April. There is also some additional support for local authorities of £150 million to make discretionary payments to provide some help with the cost of essentials, including energy. From next year, £560 million has also been made available in other UK nations.
• The Chancellor confirmed the previous changes the Government were already making to the GB-wide Warm Home Discount will go ahead, increasing the number of households eligible to 3m and increasing the rebate value to £150 from October. 

While the above package will provide some additional support, National Energy Actions believes it is not adequate in scale or suitably targeted at those most in need. We said that the package of support is ‘woefully inadequate”. 

What can be done?

Some groups have suggested that the UK Government should consider removing VAT or policy costs from energy bills. National Energy Action firmly believes that the Government should take a targeted approach, softening the bill shock for the most vulnerable households before April to avoid a full-blown energy affordability crisis.

We have also set up Donate your council tax rebate for those who are comfortably warm and don’t need their council tax rebate and would like it to help others.

Where can I get help now?

If you or someone you know can’t afford to heat their home then we’re here to help. We offer a range of advice and support both directly to people in need, and via frontline workers and other intermediaries.

For advice and support on what you can do go to our advice page nea.org.uk/advice-support/

It is worth contacting your energy supplier they can help you be put on the priority assistance register and can help with debt repayment plans.

You may also be entitled to access the Local Authority Assistance Fund or Winter Fuel Support Scheme in Wales.

For media enquiries please contact anna.cook@nea.org.uk