Published On: Wed, Jul 27th, 2022

Fears energy bills to hit SHOCKING £3,850 as Putin pushes gas price to record high | Personal Finance | Finance


Cost of living: Martin Lewis sets out energy price cap predictions

In January alone electricity and gas will cost £500 on average. Consumer rights champion Martin Lewis said: “This is going to be a horrendous autumn and winter.” The shocking forecast by consultants BFY means tens of millions will be forced to choose between heating or eating, with the elderly and vulnerable disproportionately affected.

The price cap limiting most tariffs is forecast to rise to £3,420 in October before jumping to £3,850 in January, so households will be further stung in the coldest months when demand hits its peak.

Estimates shot up due to a surge in wholesale gas prices that struck a record 530p per therm for next winter on Wednesday in an instant reaction to Moscow reducing exports via pipeline to Germany.

The hammer blow for squeezed households comes after energy bills rose to a record £1,971 a year in April. Caroline Abrahams, charity director of Age UK, said: “Even higher energy bills will be very frightening for many older people.

“We’re urging anyone who is struggling, to get in touch for a benefits check in case they’re entitled to some extra financial support.”

Russia’s invasion of Ukraine in February sparked global tensions and market volatility led to an unprecedented European energy crisis as the Kremlin limited gas supplies. This has sparked fears of winter rationing.

State-backed Gazprom has cut exports via the Nord Stream 1 pipe to just a fifth of usual capacity. The firm blamed maintenance issues but the move has been interpreted as Moscow “weaponising” gas in retaliation for Western sanctions.

Some observers fear Russia might cut off supplies entirely.

In January alone electricity and gas will cost £500 on average

In January alone electricity and gas will cost £500 on average (Image: Getty)

Dr Gemma Berwick, senior BFY consultant, said more cuts in gas flows would trigger extra price rises: “Huge swathes of the British public aren’t going to be able to afford their bills this winter. Average families with two working parents will be in fuel poverty.”

Europe relies on Russia for about 40 percent of its gas needs and EU chiefs have plans to ration use, with experts warning there is not enough liquefied natural gas (LNG) globally to make up the difference.

The UK has historically taken four percent of its gas from Russia but it is reliant on LNG, meaning prices in Britain are closely linked to those on the Continent.

Andy Willis, founder of clean energy firm Kona, said there was now no debate but that renewables were the cheapest way of generating power and keeping lights on: “Paying these [bills] in just a matter of months will be completely unfathomable for millions.

“The Government should focus on targeted support for the most vulnerable in the short term but also invest significantly more to strengthen our position in the global energy market for decades.” Gas and electricity prices soared by 54 percent overnight in April as regulator Ofgem raised the cap for an average home from £1,277.

That was blamed on supply issues caused by Russia’s invasion and inflation hitting a 40-year high.

Consumers were warned of a £700 rise from October, with bills set to be an annual average of £2,700. That appears to be a gross underestimate now and struggling households may be tipped over the edge. BFY said, based on typical patterns, an average consumer on direct debit faces paying around £100 a week in January.

Morgan Vine, of the Independent Age charity, said: “For people of pension age who have limited to no way of increasing their income, the extra money simply isn’t there.”

Pressure group Fuel Poverty Action called the prices “simply unpayable”, claiming they mean thousands more will die of cold.

Matt Copeland, policy head at fuel poverty charity National Energy Action, said: “When the price cap rises in October…8.2 million UK households could be fuel poor – that’s one in three.”

Gemma Hope, policy director at welfare charity Leonard Cheshire, warned: “Disabled people are telling us they are scared, and out of solutions. The one-off payment the Chancellor has offered to help with energy bills is simply not enough.

“We need to see real action from the Government by increasing benefits in line with inflation immediately. People receiving disability benefits must have their eligibility restored for the Warm Home Discount.”

MPs on the business, energy and industrial strategy committee say ministers need to give households more cash to help them meet bills. Existing support of £400 per household and £650 more for eight million of the most vulnerable households was announced in May, when wholesale prices were lower.

Ex-Chancellor and Tory leadership hopeful Rishi Sunak said: “As Prime Minister I will do everything in my power to protect families from rising prices. I will use our Brexit freedoms to cut VAT on energy bills to help millions.”

His rival Liz Truss has called for a temporary halt on green levies to help drive down energy bills.

A Government spokesman said: “Unlike Europe, Britain isn’t dependent on Russian gas. However, we are vulnerable to volatile gas markets. We have introduced an extraordinary £37billion package to help households.”

More than five million people have cut spending due to the cost-of-living crisis and around 250,000 are “really struggling”, according to Lloyds Bank.

Chief executive Charlie Nunn said the average family is spending £89 more per month on energy, fuel and food than three years ago due to runaway inflation.

More than two million of the bank’s customers have cancelled subscriptions to services such as TV streaming TV.

Mr Sunak defended his proposal for a £4.3billion VAT cut on fuel bills

Mr Sunak defended his proposal for a £4.3billion VAT cut on fuel bills (Image: Getty)

Rishi: You can trust me to help

Former Chancellor Rishi Sunak has vowed to do everything in his power to protect families from rising prices if he becomes Prime Minister, writes Macer Hall – Daily Express Political Editor.

Mr Sunak, who is battling Liz Truss for the Tory leadership, also defended his proposal for a £4.3billion VAT cut on fuel bills against accusations of “flip-flopping.” He warned that Vladimir Putin’s war in Ukraine was to blame for the oil price surge – and insisted he would not be “cowed” by the Kremlin.

Mr Sunak told the Daily Express: “As prime minister, I will do everything in my power to protect families from rising prices. I will use our Brexit freedoms to cut VAT on energy bills to help millions of families, on top of the support already provided.

“As Chancellor, I supported the most vulnerable families with up to £1,200 worth of support, and as Prime Minister I will continue to help those that need it most as we stand up to Putin.”

In a video released by his campaign team, he says: “If prices rise again I pledge today to make the most of our Brexit freedoms and slash VAT on energy bills.

“This will save the average household £160, on top of the £1,200 the most vulnerable households will receive.”

Ms Truss’s supporters ridiculed the £4bn proposal as a reversal of Mr Sunak’s previous insistence that inflation must be brought under control before taxes can be cut.

”We cut back on much but not our daughter’s health”

Soaring energy bills already mean a disabled girl’s father has been forced to choose between keeping her alive, warm or fed.

Dan McEvoy, of Bournemouth, pays sky-high rates for electricity to run the 11 devices nine-year-old Elisa relies on.

The family has cut back on everything else but there is only so much that can be shaved off outgoings before Elisa’s medical health is compromised.

Father-of-two Dan, 47, said: “Elisa’s medical equipment is essential, we cannot cut corners with it. We can skip meals as a family, not heat or cool the house, and a hundred other things to save a little money here and there. But with Elisa, we can’t.”

Dan, once an IT analyst, gave up work when Elisa was diagnosed with cerebral palsy in 2013.

He and wife Maiju, 34, also have six-year-old Melody together, who has tuberous sclerosis.

What to do if you are having trouble paying your bill

  1. Energy Bill Support Scheme – Government will give every household in the UK £400 off their electricity bill. You don’t need to do anything to get the money and you won’t have to pay it back.
  2. Warm Home Discount Scheme – this provides a one-off payment of £150, which you don’t have to apply for, to help with your electricity bill.
  3. Hardship Funds – British Gas is just one of the energy providers that offer hardship funds for those who can’t pay their bills. There are a number of others that offer tailored support.
  4. Check if you can get a fuel voucher – you might be able to get a voucher to help pay for your energy if you use a prepayment meter or you don’t use gas or electricity for your heating.
  5. Local energy grants – some councils run schemes to help people pay for their energy bills. You can check if you can get a local energy grant at the website simpleenergyadvice.org.uk

Comment by James Taylor – Director of Strategy at Disability Equality Charity Scope

Every day we are hearing more warnings that our energy bills are going to rocket to even more eye-watering levels.

For disabled people, the immense anxiety and stress this causes cannot be underestimated.

These amounts are so high, for many families it’s unfathomable how they will afford to pay.

Life costs much more if you’re disabled. Many families have no choice but to use more energy for life-saving equipment such as ventilators. These extra costs mean many disabled people are already living in poverty.

Without further help, many more will fall into poverty.

With the UK already in the grip of the highest inflation rates for 40 years, for many disabled people, there is nothing left to cut back.

Before this crisis, disabled people and their families already face extra costs of £583 a month. Many were already struggling to make ends meet, now it is impossible. Energy bills are predicted to rise to £4,000 a year on average. An eye-watering amount.

Even with the recent cost of living payment and disability payments announced by the Government, people won’t be able to afford to heat their homes in autumn and winter.

At Scope, we have heard from people trying to get by on one meal a day, or who have cut back on support from carers.

The question for the new prime minister has to be: how will you stop millions of disabled people being pushed into destitution?

The answer has to be further financial support, made available urgently to disabled households. We must stop disabled people from becoming the casualties of this cost-of-living crisis.



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