Tue, 18 Feb 2025

Tue, 18 Feb 2025 Energy bills forecast to rise by £85 a year

Cornwall Insight predicts that the energy regulator will hike gas and electricity prices by 5%.
A 5% increase in domestic energy prices is predicted from April, adding £85 to household bills per year, according to Cornwall Insight. For a typical household using gas and electricity, this would mean an annual bill of £1,823. The rise will coincide with increases in water and council tax bills. The energy price cap, set by Ofgem, is expected to increase from its current level of £1,738 per year for a typical household. This means higher household bills will add pressure on the government, which is already facing criticism over removing winter fuel allowances for some elderly people. Cornwall Insight attributes the predicted rise to a combination of colder weather and lower gas storage levels across Europe, leading to higher wholesale prices. Energy use tends to fall as days get lighter and warmer, but households may still face significant increases in bills. The price cap affects 26 million households on default or variable tariffs and is set every three months by Ofgem. While the cost of each unit of gas and electricity is capped, the total bill varies depending on energy usage. Households have collectively built up debt of £3.8bn to suppliers, with an average household in arrears owing more than £1,500 for electricity and £1,300 for gas. National Energy Action (NEA) has expressed concern about the impact on vulnerable households, saying it will feel like an "interminable winter" for many. The Energy Savings Trust has called for policymakers to take action to help people upgrade their homes with insulation measures, which can lower bills.
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