Millions of households are facing a nearly 4% increase in energy prices in October, with a further 9% rise predicted for January by consultancy Cornwall Insight. The energy sector suggests that high prices are likely to persist, with EDF indicating bills could remain "stubbornly high" until at least the end of the decade.
The typical household's dual-fuel bill is now 70% higher than at the start of 2021, amounting to approximately £600 more annually, according to Energy UK. This has contributed to a record high in unpaid energy debt of more than three months, as reported by regulator Ofgem. Suppliers estimate total unpaid bills and charges have reached £6bn, with expectations for this to rise to £7bn by the end of the year.
Pressure is mounting on the government to provide support for billpayers. Ofgem has a proposed debt relief scheme under consideration, and charities are advocating for a discounted tariff for those most in need, based on benefits, health, and income data. Energy UK estimates a targeted plan would cost £1.9bn.
Ministers are expected to cut VAT on electricity bills in October, though this reduction is anticipated to be outweighed by an 8% increase in gas prices. The new Chancellor, John Healey, will present his first Budget soon after the higher autumn energy bills take effect.