Millions of households across the UK are set to face higher energy bills from April, with an expected 5% increase adding approximately £85 per year to domestic energy costs.
The latest forecast from Cornwall Insight, a leading energy consultancy known for its accurate predictions, estimates that a typical household using gas and electricity will see annual bills rise to £1,823.
The rise in energy prices will come at the same time as increases to water and council tax bills, adding further financial pressure on households.
However, the government has confirmed that minimum wage levels, benefits, and the state pension will also increase from April, which may help offset some of the impact.
Cornwall Insight predicts that the energy price cap will increase from its current level of £1,738 per year for a typical household.
The increase is attributed to colder winter weather and a drop in European gas storage levels, which have driven wholesale gas prices higher.
Although energy bills remain 50% higher than pre-pandemic levels, they are still below the record highs seen in 2022, when Russia’s invasion of Ukraine led to a global energy crisis and sent prices soaring.
With gas and electricity costs rising, many households may consider switching to fixed-rate energy tariffs to gain greater price stability.
The official energy price cap announcement from Ofgem, the UK’s energy regulator, is expected on 25 February.
The price cap, which is adjusted every three months, directly affects around 26 million households on default or variable tariffs in England, Scotland, and Wales.
The cap does not limit total energy bills but rather caps the cost per unit of gas and electricity, meaning households will still pay more if they use more energy.
The prolonged period of high energy prices has led to rising levels of household energy debt, with UK households now owing a collective £3.8 billion to suppliers. On average, a household in arrears now owes more than £1,500 for electricity and £1,300 for gas.
With the cost of gas, electricity, water, and council tax all set to rise, many UK households will need to budget carefully in the coming months.
While government support measures, wage increases, and benefit adjustments will help some, energy affordability remains a growing concern, particularly for lower-income households.
As April approaches, consumers are advised to monitor fixed-rate energy deals, improve home energy efficiency, and check eligibility for government grants or supplier support schemes that could help ease financial pressure.
