Household energy bills will decrease by £122 annually from July, thanks to a new price cap. This comes as energy prices hit their lowest levels since the Russian invasion of Ukraine in February 2022. The new quarterly cap, set by Ofgem limits the price per unit of gas and electricity for households in England, Wales, and Scotland resulting in an annual cost of £1,568 for a typical household. This marks the lowest energy bills in two years and affects the gas and electricity bills of 28 million households.
While this reduction in energy costs is welcome news, it is important to note that the cap controls the price per unit of energy rather than the overall bill. Consequently, households with higher energy usage will still face higher bills. Despite the decrease in energy bills it remains significantly higher compared to pre-pandemic levels, being approximately £400 more than three years ago.
The financial relief provided by the new price cap is a positive step, but the journey to financial stability for many households remains challenging. During the recent period of high prices, consumers have accrued an estimated £3 billion in energy debt. At Debt Free Advice, we assisted over 24,000 individuals annually with debt issues and have observed a 37% increase in energy debt cases since 2022. We are committed to supporting those experiencing financial difficulties, especially with energy bill concerns.
Matt Dronfield, Managing Director of Debt Free Advice, speaks with Simon Parkin on BBC Somerset to advice those having energy bill related worries to reach out and get free impartial advice
“I urge those facing financial strain not to panic. Most people have some form of debt, but it's crucial that your debt remains manageable and repayable within your lifestyle. Our service offers free and confidential advice and our advisors are experts in energy-related debt.”
How can we help with energy bills?
At Debt Free Advice our expert advisors offer practical advice and support to individuals struggling with energy debt. We encourage those affected to reach out to their energy providers to discuss their situation. Energy companies often have programs and support mechanisms in place to assist customers in financial distress. Customers should not hesitate to negotiate these terms to better reflect their current financial situation.
There are various government schemes and financial assistance programs designed to help with energy costs. Our advisors can guide individuals on how to access these programs and maximise their income, ensuring they receive all the support available to them. This includes schemes like the Warm Home Discount and the Winter Fuel Payment.
Although the new price cap is a welcome development that will ease the financial burden on many households. However, given that energy bills remain high compared to pre-pandemic levels and with the prospect of future increases, it is crucial to take proactive steps in managing energy costs. Debt Free Advice is dedicated to providing the necessary advice and support to help individuals navigate these challenges and work towards financial stability. If you or someone you know is struggling with energy bills, please reach out to us for assistance. Together, we can work towards a more secure financial future.