ENERGY bills could hit almost £4,000 next year, with the average household set to fork out £500 for January alone.
The new grim analysis from energy consultants at BFY means more than half of the country will be pushed into fuel poverty with more than 10 percent of households’ salaries sucked up by rising gas bills.
The soaring price of energy is linked to wholesale gas prices, which hit a record high of 530p per therm on Wednesday after Russia reduced supplies through the Nord Stream 1 pipeline to Germany.
The higher wholesale gas prices has meant BFY has increased its forecasts for October’s energy price cap to hit £3,420 and for January’s price cap to hit £3,850.
Adam Jones, senior manager at BFY Group, told UK Times: “This is off the back of gas and power prices rising to all time highs.
“The winter 2022 gas price has risen nearly 10-fold since this time last year, and more than double the price of last winter’s gas.
“Official figures have an average income of £31,000, this means more than half the country could be pushed into fuel poverty.”
The ongoing stand-off between Moscow and the European Union will make it tougher and costlier for the bloc to fill up ahead of the winter heating season, which will also have a direct impact on the UK as supplies are squeezed.
Gas prices were already rising before Russia’s invasion of Ukraine but it has risen almost every day since then as Russia supplies around 12 percent of the world’s oil supply, which is used to make gasoline.
Europe is even more exposed and typically relies on Russia for 40 per cent of its gas supplies.
Wholesale gas prices have jumped from 75p a therm a year ago to 150p a therm in January and are now trading at 530p – a 600 percent increase.
The Business select committee warned earlier this week that action was needed now to help struggling households ahead of the October bill increases.
Charlie Nunn, boss of Lloyds Banking Group, Britain’s biggest high street lender, on Wednesday called on the government for targeted support for lower income families as the average Brit’s spending on food and fuel was already £89 a month higher than a year ago.
Growing fears about the cost of living squeeze forced Tory leadership hopeful Rishi Sunak to make a massive u-turn last night promising to cut VAT from energy bills, which could save households £160.
What help can I get with my bills?
If you’re struggling to pay for them or are worried about the upcoming price cap rise, there is support on offer.
Here is a list of some of the support you might be able to get hold of.
Energy Bill Support Scheme
Earlier this year, former Chancellor Rishi Sunak announced a raft of supportive measures for households struggling through the cost of living crisis.
Among them was the Energy Bill Support Scheme, which will see all households with a domestic electricity connection receive a £400 grant from October.
Households don’t need to apply for the scheme – it’s expected that in most cases electricity suppliers will apply the reduction to bills automatically.
As the money is a grant and not a loan, it does not need to be paid back.
Warm Home Discount
The Warm Home Discount Scheme is another option if you’re struggling to pay for your energy bills.
The scheme is a one-off payment of £150 that goes towards heating costs.
It is usually paid directly to your energy supplier, which will then apply the discount to your bills.
If you are someone with a pre-payment meter, you’ll be sent a £150 voucher instead which you can use to top up your account.
The government hasn’t confirmed what date the scheme will be open for applications this year, however in 2021 households could apply from October 18.
Some energy providers offer hardship funds for those who can’t pay their bills.
British Gas is one, and opened its scheme at the start of this month.
There are a number of others that offer tailored support.
To find out if your supplier can offer your help through a hardship fund, it’s best to contact them in the first instance.
Or you can check our our list of suppliers that offer help.