’Tomorrow’s price cap rise should be a red energy warning’

• The price cap is rising by 13% from tomorrow (1 July) – a typical household will now pay £1,862 a year for their energy
• Fuel poverty charity’s new paper shows how record levels of energy debt are impacting those in debt and raising bills for everyone
• Summer heatwaves expose how poorly many homes handle the heat, leaving inhabitants in dangerous conditions

With energy bills rising by 13% tomorrow (1 July), vulnerable households already struggling with their bills are set to face a summer of continued financial pressure and uncomfortable and unsafe homes.

Debt is causing persistent distress

Fuel poverty charity National Energy Action’s new paper, Clearing the Decks, highlights how record levels of energy debt mean many households are in persistent distress, with debt shaping daily routines, worsening health, and reducing their ability to cope or recover.

National Energy Action warns this is not about consumer choice or behaviour, but sustained unaffordability, with bills consistently outstripping incomes for several years.

The way energy debt is handled in the system is now pushing up bills for everyone. National Energy Action analysis shows bad debt and recovery costs are adding around £50 to £70 a year to household bills through the price cap.

Without action, National Energy Action warns the response will increasingly shift towards tighter debt collection, including greater use of forced prepayment meters. This risks households losing access to energy altogether, replacing debt with deeper hardship.

Heatwave exposes our inefficient housing

Combined with higher energy bills, increasingly frequent and severe heatwaves expose the state of our inefficient housing. Many residential buildings cannot cope with high temperatures, leaving their inhabitants trapped in dangerously hot homes, which can be life threatening to the most vulnerable. The costs of cooling and refrigeration further impact on already rising energy bills.

Adam Scorer, Chief Executive at National Energy Action, says:

’Tomorrow’s price cap rise should be a red energy warning. Energy inefficient homes take lives in winter and will increasingly threaten the most vulnerable in summer; London Ambulance Service had its busiest day on record on Friday.

‘Fuel poverty means many cannot experience a comfortable and safe temperature at home, because the building fabric makes it impossible or the cost of doing so makes it prohibitive. This is a public health emergency for the most vulnerable and needs to be addressed as such.

‘Tomorrow’s cap rise is another blow for millions already struggling. The legacy of the energy crisis is millions of households locked into debt they cannot repay, and that is pushing up bills for everyone. If we fail to act, we risk seeing more households forced onto prepayment and effectively cut off from energy. That cannot be the answer to a problem caused by unaffordable bills.

‘We need urgent action to clear this debt and stop costs being baked into the system. The right response is to scale debt relief. As our new paper, Clearing the Decks, sets out, that means enabling and expanding Ofgem’s Debt Relief Scheme with additional funding so more of this debt can be cleared, reducing harm and lowering costs across bills.’

ENDS

Notes to editors

1. National Energy Action (NEA), is the national fuel poverty charity, working across England, Wales and Northern Ireland, to improve the lives of people in fuel poverty.
2. Read our new paper, Clearing the Decks: Tackling Energy Debt to Lower Bills.
3. Typical domestic consumer energy use refers to a household that consumes 2,700 kWh of electricity and 11,500 kWh of gas per year.
4. Total energy debt has reached a new record of £4.79 billion. See Ofgem’s statistics (in ‘More information’ tab of Total financial value of domestic customer debt and arrears (existing for more than 91 days) graph.

If this press release is covered in an online article, please link to https://www.nea.org.uk/energy-crisis/. We are on Twitter/X: @NEA_UKCharity and Bluesky: @nea.org.uk.