What the Energy Price Cap changes mean for you
This increase means that the average yearly bill will rise from £1,277 to £1,971 per year.
Those on prepayment meters will be even more affected and will see their yearly bill go up by £703, to £2071.
What do the money experts say about the Energy Price Cap rises?
Colin from Money Matters says over the last 18 months he's already seen a 50% increase in people needing money advice, meaning that this will only worsen problems for lower-income households in the UK.
Behind these steep increases: the high price to buy gas. There were record rises in global gas prices in 2021 and 2022. Over 90% of electricity price rises have been linked to these rises in the price of gas.
Meanwhile, Green Levies - the only way we can reduce dependence on fossil fuels, have been cut by a third.
After the announcement, Martin Lewis, the money-saving expert, commented on the situation on ITV.
"How the hell are so many people…they are not going to be able to afford it," he said.
He further commented that the planned 54% rise was "catastrophic and disastrous for people's bills".
Mr. Lewis went on to say that the Government needed to "pull its finger out" and that this amounted to a "cost of living crisis."
Highest energy price increases in more than 15 years
Ofgem chief executive Jonathan Brearley said,
"We know this rise will be extremely worrying for many people, especially those who are struggling to make ends meet and Ofgem will ensure energy companies support their customers in any way they can."
"The energy market has faced a huge challenge due to the unprecedented increase in global gas prices, a once in a 30-year event and Ofgem's role as energy regulator is to ensure that, under the price cap, energy companies can only charge a fair price based on the true cost of supplying electricity and gas.
Our founder, Beau Savage, commented “I’ve worked in the energy industry for 15 years and these increases are the highest I’ve ever seen. The government must help people to move to their own renewable sources like solar, and help with interest-free loans or grants where possible. If people were already living in fuel poverty, what is this going to do?”
How can we combat the increase in household energy bills?
Reliance on fossil fuels is fast becoming outdated and is causing extreme hardship to those who are the poorest in the UK. While subsidies and one-off payments will help those who are most affected by these price increases, it is not a viable long-term solution.
At Smart Energy, we know that the answer to high energy bills is renewable energy sources.
On average, a solar system will save you 80% off of your electricity bills, or eliminate your bill entirely. And because you generate your own electricity, you won’t be affected by any future increases in price like today’s news, as you don’t need to buy energy from the grid.
It’s time to move forward with cleaner, greener, and cheaper energy, with less reliance on non-renewable, and increasingly scarce fossil-fuels.