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Energy bills could rise in April, NEA warns

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03/12/2021
The average cost of a gas bill in April could double compared to October last year due to an increased energy price cap, fuel poverty charity National Energy Action (NEA) has predicted.

 

NEA said the average annual gas bill stood at £467 a year in October 2020 and could rise to £944 in next year if estimated hikes to the energy price cap came in. 

Energy regulator Ofgem sets a cap on the maximum cost of energy tariffs to stop suppliers from passing expenses onto consumers. 

The last change to the cap came in on 1 October and saw the limit rise from £1,138 to £1,277 a year. This was due to increases in gas prices and the regulator warned further rises could come if prices remained high. 

NEA said an increased cap could push domestic energy prices up further, basing its estimate on predictions made by Cornwall Insight, Baringa and EnergyShop.com. In October, Cornwall Insight forecast that Ofgem would increase the price cap by 30% to £1,660 a year. 

Additionally, NEA said average combined domestic dual fuel bills could rise by £550 per year in April if the energy price cap increases. 

A combined domestic dual fuel tariff is when a home’s gas and electricity is from the same supplier.  

NEA has estimated that the average price of an annual gas bill could increase by as much as £350 in April, with the electricity bill increasing by £200, when compared to the current level of the cap. 

The charity also pointed out that average domestic energy bills had already soared by over £230 per customer compared to last winter. 

Adam Scorer, chief executive of NEA, said: “Every home should be a warm and safe place, but for over 4.5 million UK households the cold reality is very different and getting much worse.  

“The cost of living in the UK is at its highest level in a decade with household energy bills the biggest driver. When the costs of essential services go up, those on lowest incomes get hit hardest.” 

He added: “Bills have increased by well over £230 since last winter and millions now face a daily heat or eat dilemma. We estimate energy bills will rocket again in April, doubling the average householders’ heating bills since last year.  

“For people already on a budgetary knife-edge, the cost of keeping a family warm has exploded while budgets have collapsed. No amount of useful tips or savvy shopping can cope with that.” 

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