On 3 February 2022, the energy regulator Ofgem announced a 54% increase in energy costs. This is due to take effect from April 2022. Previously there was a 12% price increase in October 2021 and prices are likely to rise again in October 2022.
Why are energy costs increasing?
The main reason is because global wholesale gas prices have risen. Gas is used to generate some of our electricity here in the UK. Greater demand for energy, particularly in Europe during cold winters, puts pressure on the gas supplies available in storage. Gas supplies have also been squeezed during the pandemic and because of demand from other countries.
How will the energy price rise affect households?
From April 2022, the average household energy costs will be:
- £1,971 per year (dual electricity and gas, paying by direct debit)
- £2,017 per year (prepayment meter customers)
What support is available?
In July 2022 the Government announced a £400 discount on energy bills to support households during the winter.
The Government has previously announced support that includes a £150 council tax rebate in April 2022 for households in council tax bands A to D.
Energy providers will be offering a £200 discount, backed by the Government. However, this will need to be repaid over 5 years in £40 instalments.
For up to date information on saving money on your energy bills, visit Money Saving Expert.