UK households could be hit with a significant increase in their energy bills, as the price cap is predicted to rise by £98 by next winter, warns energy supplier EDF. The current price cap, set by regulator Ofgem, results in an annual bill of £1,738 based on typical household use.
Looking forward, EDF anticipates that the April to June cap could escalate to around £1,827, with another hike expected later in the year. The company said: “We forecast a rise to £1,836 from October to December,” cautioning that energy prices remain highly volatile due to fluctuating wholesale prices and the ongoing global energy crisis.
EDF also warned of potential instability in wholesale prices in the coming months. Furthermore, non-energy costs, such as fees for maintaining transmission and distribution networks, remain uncertain and could further impact bills.
Moneysavingexpert founder, Martin Lewis, advised that while 80% of homes are on the price cap, substantial savings can be made by switching to a cheaper fixed rate deal, potentially saving more than £100 a year. He said: “Prices are going up and people need to take action now. Get off the pants cap.”
Rich Hughes, Director of Retail at EDF, explained that wholesale gas and electricity prices, which make up around 40% of a household’s energy bill, have surged by 30% since mid-December. He attributed this increase to factors including global gas supply issues and geopolitical tensions.
The continued turmoil from the Russia-Ukraine conflict has rippled through to UK households, with many already grappling with escalating living costs. “Many households are already struggling with the rising cost of living, and this latest price increase is a worrying trend,” said Hughes.
In response, his firm has striven to keep tariff prices competitive, launching a tracker tariff that’s £100 beneath the cap. Aside from immediate measures, Hughes spotlighted the necessity for lasting remedies to enhance energy affordability and referenced Martin Lewis, renowned consumer expert, advocating for a social tariff to assist vulnerable customers. Hughes said: “The ongoing volatility in the energy market underscores the urgent need for a meaningful solution to help those who need it most.”