Biggest jump in domestic energy bills in living memory comes into effect

ITV News consumer editor Chris Choi reports on how the cost of living crisis is impacting those who are struggling to afford to pay their bills

The biggest jump in domestic energy bills in living memory has come into effect as charities warn that 2.5 million more households are set to fall into “fuel stress” and supplier websites remained unresponsive to customers.

The energy price cap for those on default tariffs who pay by direct debit is rising by £693 from £1,277 to £1,971 from April 1.

Prepayment customers will see a bigger jump, with their price cap going up by £708, from £1,309 to £2,017.

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The regulator was forced to hike the energy price cap to a record £1,971 for a typical household as gas prices soared to unprecedented highs.

Various global factors have led to a surge in demand for oil and gas - made worse by the impact of Covid - and meant suppliers have had to pay more to buy fuel, a cost now being extended to customers.

Fuel poverty charity National Energy Action (NEA) warned the cost of heating an average home has now doubled in 18 months, leaving 6.5 million households unable to live in a warm, safe home across the UK.

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As a 54% increase to Ofgem’s price cap hit bills, the Resolution Foundation think tank said the number of English households in fuel stress – those spending at least 10% of their total budgets on energy bills – was set to double overnight from 2.5 to five million.

Citizens Advice said around five million people would be unable to pay their energy bills from April, even accounting for the support the government has already announced.

It warned this number would almost triple to one in four people in the UK – more than 14 million – if the price cap rises again in October based on current predictions.

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Mother-of-two Aldona Kowalczyk says her bill for electricity and gas has risen sixfold – from £25 last April to £150 this month.

She is grateful that they will still be able to afford food – though buying gluten-free products for her children is now more expensive too – but they will have to cut out anything deemed as a “luxury.”

This includes new clothes, which she says they will have to borrow from friends if needed.

“It will be especially [hard] if people are elderly or they are single mums, they will be hit, we as a family will be hit as well,” she told ITV News

With her husband working longer hours and night shifts, she remains positive, especially as she is now looking to work full-time rather than part-time.

'We have restrained from buying new clothes'

Concern about the pressures households are facing came as energy firms continued to struggle to allow customers to submit up-to-date meter readings to avoid paying the higher tariff on energy used before April 1.

Customers reported issues logging in to supplier websites including British Gas, EDF, E.On, SSE, So Energy and Octopus Energy from early on Thursday.

Energy UK, the trade body for the industry, urged people not to worry if they were unable to submit a meter reading ahead of Friday.

It said: “Most suppliers are offering alternative options such as submitting at a later date, and different methods to send meter readings such as text, social media and email.

“This demonstrates the scale of the problem and how worried people are about high prices, which is why we have been asking government to intervene to provide further support to consumers.”

Labour leader Sir Keir Starmer told ITV News the government has given "no comfort" to people worried about their bills.

"The government response has been utterly pathetic, no real response to that, no comfort to people who are worried," he said.

"What we the Labour party have said is, look, the oil and gas companies in the North Sea have made excess profits over and above what they expected because of the high level of pricing across the world.

"That windfall tax should be used to take up to £600 off people's bills."

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Higher energy prices are not the only way households are set to feel the pinch, with tax rises, council tax increases, reductions in state pandemic support increasing costs for businesses, and petrol and diesel at near record price highs.

The cost of buying a pub meal, soft drink or hotel stay could become more expensive from this month as VAT levels across the hospitality sector lift back to 20%, while the National Insurance tax rise will come into force on April 6.

Fuel prices have also reached record highs in recent weeks amid a rise in oil prices following Russia’s invasion of Ukraine.

Mr Sunak cut fuel duty by 5p in his spring statement last week, but retailers have been accused of failing to fully pass on the saving.

(PA Graphics) Credit: PA Graphics

Citizens Advice Chief Executive Dame Clare Moriarty branded the energy price cap rise as "potentially ruinous for millions of people across the country.

“The support announced so far from the government simply isn’t enough for those who’ll be hit hardest. With the long-anticipated price rises now hitting, many more people will face the kind of heart-rending choices that our frontline advisers already see all too often.”

Policing Minister Kit Malthouse admitted the situation would be "extremely tough for millions of people across the country," saying the chancellor had "moved to assist", citing the increase in the living wage and the national insurance threshold rise.But there were calls for more to be done by the government to help people who were struggling with rising prices.

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Chancellor Rishi Sunak has previously pledged to “take the sting out” of the price rises, promising all 28 million households in Britain would get a £200 upfront rebate on their energy bills from October.

The government will provide the cash for this, but it wants the money back so will hike bills by £40 per year over the next five years from 2023 to recoup it.

Goldman Sachs has already warned that prices in the gas market are likely to remain at twice their usual levels until 2025.