Over four million people will see a 4% energy bill rise on Thursday, which adds £60-a-year to the typical bill – taking it to £1,723 – just as the cooler weather sees millions crank up their heating
More than four million households will be clobbered with higher energy bills from tomorrow (October 1), with worse pain to come in the New Year. The 4% rise adds £60-a-year to the typical bill – taking it to £1,723 – just as the cooler weather sees millions crank up their heating.
And experts warn the Iran war could send costs soaring by another £276 in January, pushing the average bill to almost £2,000. Analysts at Cornwall Insight predict the typical dual-fuel bill will jump 16% to £1,999 from New Year’s Day, the biggest rise in four years.
The grim forecast has been blamed on turmoil in the Middle East. Gas supplies are being choked after the vital Strait of Hormuz shipping route was effectively closed.
European reserves are at their lowest September level for 15 years. Cornwall Insight’s Dr Craig Lowrey warned: “These prices are going to hit households hard.
“January is already a difficult month for many, with cold weather and bank balances still recovering from Christmas, and now they face the biggest price cap rise we’ve seen in four years.”
He warned the effects of the conflict could be felt for “many more months”.
From today, the typical household in England, Scotland and Wales paying by direct debit for gas and electricity will see its bill rise by around £5 a month.
The Government has axed the 5% VAT on household electricity bills until the end of March, saving the average bill payer around £45 a year.
It was one of Prime Minister Andy Burnham’s first moves after entering Downing Street in July.
But households will continue to pay 5% VAT on gas, while experts are calling for further help in next month’s Budget.
National Energy Action boss Adam Scorer said: “The Autumn Budget must deliver additional targeted support for households most at risk this winter.”
Meanwhile, households without smart meters have been urged to submit readings before the new prices kick in to avoid paying the higher rate for energy used before October 1.
Ofgem will announce the final price cap for January to March in November.