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Energy prices hit record high

Energy prices hit record high

Category: Gas and electricity
10/08/2018

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Winter is rapidly approaching, which means the boiler will soon be going into overdrive to beat the chill – yet unfortunately, it'll cost more than ever to heat your home, with energy prices now the highest on record.

Highest energy prices in history

That's according to research from energyhelpline, which found that energy prices are now 33% higher than they were six years ago – averaging at £1,135 per year for a typical dual fuel bill – which is understandably taking its toll on our wallets. Indeed, energy prices have ramped up by 9% so far this year while wages have only risen by 2%, and with inflation running at 3%, many could be struggling to afford to heat their homes this winter.

Take a look at the table below to see by just how much prices have risen in the last six years (figures are adjusted to today's typical dual fuel usage levels, as defined by regulator OFGEM, of a household paying by monthly direct debit using 12,000 kWh of gas and 3,100 kWh of electricity per year):

Date Typical Annual Household Gas & Electricity Bill Increase since Summer 2011
Jul-11 £852
Dec-11 £981 15%
Mar-12 £957 12%
Feb-13 £1,040 22%
Dec-13 £1,111 30%
Mar-14 £1,097 29%
May-15 £1,083 27%
Nov-16 £1,043 22%
Nov-17 £1,135 33%

Source energyhelpline.com, 21/11/17

Heat or eat?

"UK energy prices, after a few years of falls, are now back at record levels beating the previous highs of 2013," said Mark Todd, co-founder of energyhelpline. "We are now paying the highest energy prices in our history and millions are set to struggle to stay warm this winter."

He said that many suppliers have pushed up their prices sharply so far this year, driven by concerns of the impending price cap and the ongoing costs of Government policy, and consumers are literally paying the price.

"At the same time, average wages have been falling in real terms as inflation outpaces pay," he continued. "This is nowhere more evident than in energy where prices have risen by 9% this year but pay only by 2%. This cruel double whammy will force many families to live in cold homes this winter or go into debt to pay bills. The UK is in an energy affordability crisis and it is just getting worse."

Those in the grips of that crisis could find they're forced to decide between heating or eating, with pensioners and families the hardest hit; additional figures from npower show that half of pensioners and a third of families will cut back on hot baths and showers this winter to reduce the energy bill, while one in 20 send their children on playdates in the winter as they can't afford to heat their own home.

As a result of such hardship, energyhelpline is calling on the Government to do more to help cut the cost of heating, and changing the way their energy policies are costed could be a way to go, said Mark: "The Government need to think if they really ought to be making families pay for their energy policies. Their track record is to pass costs on to suppliers who then pass them on to customers. There is another way – to fund policies through taxation or cut their scope."

However, even if changes come to pass, it'll be a while before anything filters through, which is why you'll need to be proactive if you want to lower the cost of your energy bills.

"If customers want a decent energy deal not a record price then they need to switch," said Mark. "In a free market, no supplier is going to hand you a great deal on a plate, but you can grab one pretty easily using a price comparison service."

Switching suppliers could save you hundreds of pounds, as while the average energy bill currently stands at £1,135, the cheapest tariffs are around £850 a year, giving you an instant saving of £285 – and if you've never switched or are on a standard variable tariff, you could save even more.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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