Soaring energy costs: The price cap on energy fails to provide adequate relief for people struggling to make ends meet during this coming winter
In an effort to alleviate the cost-of-living pressures faced by households, the Ofgem price cap on gas and electricity has been implemented, affecting 29 million homes across England, Wales, and Scotland. The new price cap, which commences on 1 October 2022 and lasts until 31 December 2023, is estimated to help households shave £250 off their yearly energy bill.
However, new figures from Citizens Advice suggest that the impact of high energy bills may be more severe than previously thought. Over 40,000 people with energy debts sought advice from Citizens Advice in the first six months of 2023, marking a 17% increase from the same period last year. The average energy debt for those seeking advice in 2023 is around £1,711, which is a 33% increase compared to 2019.
These figures highlight the need for continued support and assistance for households struggling with high energy bills. Ofgem's chief executive, Jonathan Brearley, acknowledged the struggles households are facing, but stated that he cannot guarantee that the cost-of-living challenges will ease this winter.
Mike Thornton, chief executive of the Energy Saving Trust, has claimed that the price cap may not be enough to save households from financial disaster. Instead, Thornton emphasized that a key priority should be to support individuals to use less energy in their homes and buildings. He suggested that the onus isn't on households, but on the government to shift the emphasis towards reducing energy demand - how much energy people are using and when.
Thornton also underscored the importance of addressing the root causes of high energy prices, such as over-reliance on gas. He pointed out that the specific government authority responsible for pursuing this approach is not explicitly identified, but responsibilities related to energy supply, approval procedures, and energy transition projects in certain German regions appear linked to regional government bodies.
The new figures from Citizens Advice may prompt further action from government and energy suppliers to address the issue of high energy bills and their impact on households. Mike Thornton warned that energy prices are still high and there may be increases again this winter. As such, it is crucial for households to seek advice and assistance to manage their energy usage and debts.
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