Updated: Apr 6
Energy boss warns that half of UK households set to face fuel poverty if government doesn't intervene. The cost of living crisis and the increase in the energy price cap has seen us all watching our wallets a little more recently, but are we going to have to tighten our budgets even more? Continue reading to find out what EDF bosses predict?
What should i expect with my energy bills?
Bosses of one of the largest energy providers in the UK has announced that half of UK households could be plunged into fuel poverty at the beginning of next year, urging the government to intervene ASAP. Managing director of EDF energy has warned that Brits face a “dramatic and catastrophic winter” ahead of the energy price cap increase to be announced today. Experts have predicted energy bills could hit a massive £6,552 by next April after a hike in gas prices added almost £500 to the forecasted price cap.
Under Boris Johnson’s government, Downing Street has ruled out offering immediate extra help and has said any major financial decisions will be postponed until either Liz Truss or Rishi Sunak take over as prime minister. With nearly two weeks before the new prime minister takes office, critics are saying that action is needed now, rather than further leadership debates between Rishi Sunak and Liz Truss.
Amid these warnings, Liz Truss is yet to reveal how she plans to help the most vulnerable if she were to win the leadership election against Rishi Sunak. Managing director of EDF, Philippe Commaret told ITV News he is "very concerned" for customers and said the level of support provided by the government is far from enough. He went on to say “What we face in January is that more than half of the UK households will be in fuel poverty…. which means that more than 10% of their disposable income will have to be invested to pay for their energy bills.”
Mr Commaret said that EDF is launching a campaign that aims to help their customers cut bills with energy-saving measures, and is offering more support. However, the scale of the problem requires further government intervention to avoid disaster. He stated that despite the help the government has already announced Britons face “a dramatic and catastrophic winter”.
With people already feeling the impact of the worsening cost of living crisis, with many fearing they will have to choose between eating and heating during the winter months tory leadership hopefuls Ms Truss and Mr Sunak have come under increasing pressure to reassure households. But the foreign secretary has been criticised for their lack of plans to help people pay their bills.
Although behind in the tory leadership race, Mr Sunak's vision to help solve this energy crisis has been a lot clearer than plans laid out by Liz Truss. He has pledged to remove VAT from energy bills and provide direct financial assistance to pensioners and those on the lowest incomes. On the other hand Liz Truss, has promised to cut green levies but has not said how she will help the more vulnerable members of society. Liz Truss has said “What I can’t do today is announce a full future budget, but I can assure you I really understand the pressures people face".
Ofgem will announce the new price cap today, with energy industry consultants Cornwall Insight warning that households will face an 80% rise in bills as we head into the winter period. Energy prices are tipped to hit £3,554 from October, and predicted to rise to £4,650 from January. This means that over the coldest months of the year the average household will pay an equivalent £4,102 per year on their gas and electricity bills.
Downing Street has insisted that there is no need for consumers to worry about their bills and “households, businesses and industry can be confident they will get the electricity and gas that they need over the winter”.
If you have any questions or concerns about how this could affect the ability to pay your mortgage, feel free to get in touch and potentially speak to lenders preventatively rather than getting into arrears!