Energy bills set to hit £3,000 a year
The current energy price guarantee scheme will continue from April – at the higher level of £3,000 a year. There will be additional lump sums: £900 for those on means tested benefit, £300 for pensioners and £150 for those with a disability. There will be more money to support energy efficiency improvements.
Sarah Coles, senior personal finance analyst, Hargreaves Lansdown said: “The new energy support package will come as something of a relief for average earners, who were worried they might be left out in the cold. The new package, from April, will keep bills at £3,000 for average users – protecting them from a rise to as much as £3,700.
“This still leaves them with a horrible mountain to climb. In March this year we were paying an average of £1,277 on our energy bills, so we’ll have to find almost two and a half times more cash to pay our bills within 13 months. The fact that this comes on top of so many other price rises means life is going to get even tougher next spring.
“The rise would be an impossible challenge for those on lower incomes, so the additional support payments from the government are absolutely vital. However, we already know the horrible struggle so many of those on universal credit have in keeping the lights on, so even at this level there will still be enormous number of people facing impossible choices.
“Across the board we can expect more people to turn to support from their energy providers, more to be borrowing to make ends meet, and more to fall behind on their bills. Given that we will be going through a recession at this point, it means that those who have found it difficult to manage in 2022 could run into a brick wall financially next year.
“It’s going to make it even harder for people to find the cash to spend on energy efficiency improvements. The government is putting £6 billion more aside from 2025 for improvements and launching an Energy Efficiency Tax Force. It’s a step in the right direction, but it’s a long time to wait for this extra spending, and it remains to be seen whether this will be enough to make measures affordable for everyone in desperate need.”