Energy bills forecast to rise by £85 a year

Consultancy Cornwall Insight predicts that UK household energy prices are expected to rise by 5% from April, meaning an increase of £85 per year on energy bills for each household. The agency, widely recognized for the accuracy of its forecasts, stated that a typical household using gas and electricity will pay £1,823 per year for energy.

Meanwhile, Energy Secretary Ed Miliband has written to energy regulator Ofgem, urging it to take swift action to protect consumers. The expected rise in energy prices coincides with increases in water bills and council tax in April. However, the minimum wage will also increase, and welfare benefits and state pensions will also rise.

Cornwall Insight forecasts that the energy price cap will rise from the current £1,738 per year for a typical household. Higher household bills could put more pressure on the government, which has previously faced criticism for removing winter fuel payments for pensioners who do not claim pension credit or other means-tested economic support. Ofgem will announce the official new energy price cap level on February 25, which will affect households in England, Wales, and Scotland.

Cornwall Insight said the increase is the result of a combination of cold weather and declining European gas storage levels, leading to a sharp rise in wholesale prices. Current energy bills are about 50% higher than pre-COVID levels, but still lower than the peak reached in 2022 when Russia's full-scale invasion of Ukraine caused energy prices to soar. The energy price cap affects 26 million households using default variable tariffs and is set by Ofgem every three months. While the cost per unit of gas and electricity is capped, the total bill is not, so household bills will vary depending on energy usage.

National Energy Action (NEA), a charity that aims to help those struggling to pay their energy bills, said that for many, this will feel like a "never-ending winter". NEA's Chief Executive Adam Scorer said: "There is no way to adapt to this new normal for the people we are trying to help. Millions of the most vulnerable households are struggling with debt and severely restricting their heating." The Energy Saving Trust said that changing the way buildings are insulated can help reduce bills. Stu Horn, Policy Manager at the Trust, said: "We urge policymakers to take clear, actionable steps to help people upgrade their homes to make them warmer and cheaper to heat."

In his letter to the regulator, Miliband asked Ofgem's chief executive to clarify what faster means could be taken to alleviate the pressure of the "roller coaster" in the global gas market. He wrote: "In recent months, we have once again seen our country exposed to the dangers of fossil fuel markets controlled by petrostates and autocrats. The British people and British businesses will once again face the consequences of fossil fuel markets beyond our control."

Experts shared three tips for controlling energy use during warmer months: If your hot water is too hot to wash your hands, your settings are too high, so turn down your boiler; manage your vents, such as putting black bags filled with crumpled paper into unused chimneys, or restricting other vents around the house; limit your shower time to four minutes. The charity WaterAid has compiled a playlist of four-minute songs to help you time it.