Falling energy prices will mean lower bills next year to ease cost-of-living crisis
Typical annual energy bills are forecast to be around £2,400 next year (2023-24), down from the predicted £3,000 at the time of the Autumn Budget, according to a report The Only Way Is Down, published today by think tank the Resolution Foundation.
While, hard-pressed households may breathe a sigh of relief at the prospect of lower outgoings, the report also stated that energy bills are still set to be 20% (or £400) higher than they have been this year (2022-23), due to the scaling back of Government support. In the year running up to the pandemic (2019-20), typical bills stood at £1,200 a year.
The report also noted that, after blanket assistance from the Government with the Energy Price Guarantee (EPG), falling gas prices mean that universal support with bills, delivered via the scaled back EPG, will drop by almost 90% next year.
This, combined with slightly higher cost-of-living payments, mean that the poorest fifth of households are set to receive six times as much support with their energy bills as the richest fifth of households (£840 vs £140).
Falling gas prices are ‘a good news story’
Emily Fry, economist at the Resolution Foundation, said: “Falling wholesale gas prices have been the big economic good news story of the year so far. This will bring real benefits to families, even if it might not feel like it for some time to come.
“While energy bills are still set to rise next year by another £400, we’re not on course to see the sustained £3,000 annual bills many feared.
“The cost-of-living crisis is far from over, but falling gas prices mean that it’s looking less bleak than just a few months ago.”
According to energy consultancy Cornwall Insight’s revised predictions, it suggests energy bills will fall to £3,208 from April, and will decrease further to approximately £2,200 for July-August, and September to December 2023.