Unanticipated surge in energy prices, leading to an unprecedented hike to £1,849 in April costs
The upcoming energy price increase for an average UK household is set to take effect from April 1, 2023, with the annual cost rising to £1,849 for dual-fuel households paying by Direct Debit. The increase, equating to an additional £9.25 per month, is primarily driven by a spike in wholesale energy prices, accounting for 78% of the total rise.
Several factors contribute to the significant increase in energy prices. These include increased demand for electricity due to the shift towards renewable energy sources, supply constraints and infrastructure issues, high wholesale gas prices, market structure, inflation, regional variations, lower gas storage capacity, and geopolitical tensions.
In response to the financial pressure on households, Ofgem, the energy regulator, is working on a Debt Relief Scheme to help customers pay off energy debts. Details about the scheme's potential impact are not yet available. In the meantime, customers struggling to pay their energy bills are urged to reach out to their supplier for assistance.
To navigate the energy crisis and lower heating bills, households can adopt various energy-saving tips. These include installing solar panels and battery systems, improving home energy efficiency, monitoring and reducing usage, considering smart meters and tariffs, and exploring available grants and schemes to assist with energy costs and home improvements.
The government is also expanding the Warm Home Discount, providing financial support to nearly three million households most in need. To offset rising costs, households are advised to shop around for the best energy deals, with 11 million customers now on fixed tariffs.
Quick fixes for lowering energy bills include swapping to LED light bulbs, while long-term investments in energy efficiency can lead to significant savings. Accurate meter readings can help avoid overpaying based on estimates.
In addition, the government has launched an energy MOT service to help households make energy-saving improvements to their homes, and the joint priority services register, combining energy firms and other utility services' databases, is being developed to make it easier for customers to find the right support.
Despite the challenges, Ofgem continues to encourage investment in cleaner, homegrown energy sources for long-term stability. Jonathan Brearley, CEO of Ofgem, acknowledged the financial pressure on households due to the energy price increase.
Although prices have dropped since the peak of the energy crisis, further fluctuations are possible due to reliance on imported energy. Households are encouraged to stay informed, make energy-saving adjustments, and seek available support to manage their energy costs effectively.
[1] GOV.UK. (2022). Energy price cap rise: What you need to know. Retrieved from
- Navigating the energy crisis at home can lead to lower heating bills by implementing energy-saving tips, such as installing solar panels and improving insulation, monitoring usage, and considering smart meters and tariffs.
- To manage rising energy costs, households are advised to shop around for the best energy deals, with grants and schemes available to assist with energy costs and home improvements.
- The government's Debt Relief Scheme, intended to help customers pay off energy debts, is under development, with details about its potential impact not yet available.
- The energy MOT service, launched by the government, aims to help households make energy-saving improvements to their homes, while the joint priority services register combines databases of energy firms and other utility services to make finding the right support easier.
- Despite the financial pressure on households due to the energy price increase, Ofgem continues to encourage investment in cleaner, homegrown energy sources for long-term stability.
- With high utility costs, it's essential to consider long-term investments in energy efficiency, such as accurate meter readings, swapping to LED light bulbs, and exploring available energy-saving guides and industry information in finance.
- The upcoming energy price increase for an average UK household, taking effect from April 1, 2023, is set to cost £1,849 for dual-fuel households paying by Direct Debit, primarily driven by a spike in wholesale energy prices.
