Cost of Living: Most people underestimate the rise in energy costs

EMBARGOED TO 0001 WEDNESDAY AUGUST 10 PICTURE POSED BY A MODEL File photo dated 08/01/22 of a person holding an energy bill. Households already owe their utilities €1.3 billion two months before bills are set to soar by more than 80%. The total debt bill is already three times what it was a year ago, experts at Uswitch said on Wednesday, and it seems likely they will continue to rise over the winter. Issue date: Wednesday August 10, 2022. PA Photo. According to a survey by the company, six million households across the UK owe their utility company an average of £206. In April the same average debt was £188. See PA story CONSUMER Bills. Photo credit should read: Danny Lawson/PA Wire

More than one in ten believe energy bills will fall this winter, study finds (Image: PA)

Most households are underestimating the massive energy price hikes forecast for this winter — some people even think they will fall, new research shows.

Families believe their household gas and electricity bills will increase by £487 from the start of October, according to a study commissioned by Uswitch.

But experts have predicted they will more than triple.

The bill for an average household will increase by around £1,600 to over £3,600 according to the latest forecasts.

More than a quarter of households said they do not know what is likely to happen with the price cap on energy bills.

Meanwhile, 12% said they think it will decrease this winter.

Just around one in 13 people (8%) thought bills will increase by more than £1,500 – what experts predict.

Richard Neudegg, Director of Regulation at Uswitch, said: “With the summer holidays in full swing, it’s not surprising that so many people have been unaware of the price cap changes.”

He urged the government to act quickly to provide more household support. Current plans were announced in May when the price cap was expected to hit around £2,800 in October.

Undated file photo of a person using a central heating thermostat as low-income households will have to reduce their purchasing power three times as much as high-income households to be able to afford their energy bills this winter, according to a think tank. PA photo. Issue date: Sunday August 14, 2022. The Resolution Foundation's predictions were based on forecasts by consultancy Cornwall Insight that the energy price cap could rise to £4,266 from January. See PA story MONEY Energy. Photo credit should read: Steve Parsons/PA Wire

Study suggests households underestimate energy bill price hikes by a third (Image: PA)

It is now believed to be £800 higher than October and could reach as much as £5,000 in April.

The Government announced in May £400 for each household, to be paid in six installments. It also pledged support of up to £1,200 to more vulnerable people.

“While the promised £66 a month over the winter is a good start, it will hardly touch the pages of the projected increase,” Mr Neudegg said.

“Energy bill support urgently needs to be reviewed.

“The new predictions will worry many people about how they will afford their bills this winter and beyond based on the sky-high predictions through next October.

“Households urgently need to know that adequate financial support is being provided.”

He added: “If you’re concerned about your bill payments or your energy account is in debt, speak to your provider as soon as possible.

“They should be able to help you find a way forward, like working out a more affordable payment plan.

“You may also be eligible for additional assistance such as hardship funds and other energy assistance programs.”

The two Tory leaders have been urged to urgently tackle the cost of living crisis.

Leader Liz Truss and rival Rishi Sunak have been urged to more than double government support for low-income families to avert a “disaster” over the winter.

It came as Sir Keir Starmer unveiled Labour’s £29bn plan, which would freeze the energy price cap at its current level of £1,971 for six months from October, with the aim of saving the average household £1,000.

Opinium researchers surveyed 2,000 adults across the UK online between July 19 and 22. They weighted the sample to be politically and nationally representative.

People were asked: “Ofgem is to review the energy price cap again in August with a view to implementing it in October. After the October review, what do you think will happen to the price of your Standard Variable Plan?’

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https://metro.co.uk/2022/08/16/cost-of-living-most-people-underestimating-energy-bills-price-rise-17189513/ Cost of Living: Most people underestimate the rise in energy costs

Justin Scacco

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