In May 2022, Ofgem predicted that the typical household would pay an extra £800 per year for their energy prices, by October. However, Ofgem Chief Executive Jonathan Brearley has now stated that that estimate for winter bills is too low.
Earlier this week, Brearley told MPs on the Public Accounts Committee that it was clear that “prices are looking higher than they did when we made that estimate,’ citing the current pricing dynamics and the ongoing war in Ukraine as major contributing factors. One industry analyst has predicted a rise of more than £1,200 by October, with that figure projected to increase by a further £150 by January 2023.
The original figure given by Ofgem was used to by ministers to decide how much support to offer households in preparation for increased winter bills. However, with new statistics suggesting an even harsher winter ahead, many are calling for further government assistance to help households cope. Martin Lewis, founder of Money Saving Expert, has argued that the £400 energy bill reduction will be almost instantly swallowed up, making little difference to the strain on households.
Many households are expected to face ‘fuel poverty’ due to increasing energy prices. The charity National Energy Action (NEA) has warned that:
“Millions will simply not be able to heat their homes. We will see serious ill-health and early deaths for those most susceptible to the cold.’