Energy bills could hit £5,000 next year, experts warn

·Finance Reporter, Yahoo Finance UK
·2-min read
energy bills EMBARGOED TO 0001 MONDAY JULY 11 PICTURE POSED BY A MODEL File photo dated 08/01/22 of a person holding an energy bill. A pandemic-level response is needed to address the energy bills crisis and avoid a
Renewed energy bills warning as price cap could hit £5,000 in direst forecast to date. Photo: PA

The cap on energy bills could reach £5,000 next year, according to independent energy consultants.

Energy consultancy Auxilione said that at Wednesday’s energy prices they expect that regulator Ofgem could be forced to set the cap at £5,038 per year for the average household in the three months beginning next April. That is more than £200 higher than previous forecasts.

Auxilione also predicted that bills would reach £4,467 in January.

Read more: Property: How energy efficiency can improve value of your home

This forecast is likely to worry energy users more than April’s higher number, as households use more gas during the winter months. As it stands, the nightmare scenario would mean that an average household will spend £571 on energy in the month of January.

It comes just hours before ministers are meant to sit down with energy companies to discuss the bleak winter ahead.

Chancellor Nadhim Zahawi and business secretary Kwasi Kwarteng are set to press Britain’s utility companies for a solution to the soaring bills.

Auxilione said there will be little the businesses can do, as gas prices are set internationally.

“Today the UK government has called energy companies in to try and find a way to bring down prices,” it said.

“It seems there is little appreciation just how impossible that task is and neither have control over this in such a globally-influenced market.”

Tory leadership rivals Rishi Sunak and Liz Truss have been grilled on what they would do to help Britons struggling with the record-breaking costs of gas and energy.

Sunak said he would offer more support for the most vulnerable, while Truss has pledged tax cuts.

Read more: Energy bills: 6 million households already in debt before October rise

Auxilione’s prediction is based on today’s energy price on wholesale markets. The final price is calculated by tracking the wholesale price over several months.

Campaigners and energy companies have said that more support is needed, especially for the most vulnerable customers in society.

“Everyone will hope these estimates of energy bills hitting £5,000 are wide of the mark but they reinforce the urgency of dealing with this crisis to help the ever-growing numbers of people who are already being pushed into or living in poverty," Rocio Concha, Which? director of Policy and Advocacy, said.

“The government must move quickly to increase the amount of financial support it is providing to help families and households make ends meet, while ministers and businesses should work together to look at what more they can do for those facing serious financial hardship," she added.

The latest price cap is due to be announced at the end of August by Ofgem.

Watch: Why are gas prices rising