It has been announced that the energy price cap will increase by an astounding 54% from April 2022 the UK government have announced a series of support measures intended to provide some help with energy bills. But what does this Government support mean for you and how will it help with your energy bills and the overall rising cost of living?
Rising energy costs: the latest
Energy costs have been on the up for the past year now due to rising wholesale gas prices. The latest sting for consumers comes as it was announced that the price cap will rise by 54% in April 2022. Although it was predicted the price cap would rise by 50-55%, the fact the rise has been confirmed at the higher end of the scale is a detrimental blow to consumer budgets who are battling the ever-rising cost of living.
The latest increase means that the average household faces a £693 rise in the cost of energy, taking the average UK bill to £1,971.
These all-time high energy bills are leaving many in the UK facing the decision between starving and freezing. It is such dire financial situations that have resulted in the UK government stepping in with an energy support package.
Government help with energy bills
The Chancellor, Rishi Sunak, has announced that millions of households will receive £350 of government support to help protect them from rising energy costs. This is broken down as follows:
- All domestic electricity customers will get £200 off their energy bills from October
- Households in brackets A-D will receive a £150 Council Tax rebate from April.
- There will also be a £144 million discretionary fund for councils aimed at those on low incomes who don’t qualify for help due to their council tax band e.g. they do not pay council tax.
This is in addition to the Warm Home Discount which will rise to £150 and will be expanded, making an extra 780,000 homes eligible for the scheme.
While this government support is welcome, campaigners are concerned this does not go far enough. Even with a £200 discount on energy bills from October, this still leaves customers with a £493 deficit – this is also not taking into account another expected rise in the price cap in October 2022. The £200 discount is also a loan, meaning consumers will pay this back in £40 installments in coming years.
Urgent help with energy bills and the rising cost of living
While the price cap is set to rise again in April, UK households are already seeing high, unaffordable energy bills that are plunging millions into fuel poverty. Sadly, a £200 discount will come too late for families that are struggling to pay energy bills this winter.
And, it isn’t just energy bills that are causing a financial crisis. Inflation is at its highest level since 1992, food prices have risen by 4.2% and National Insurance Contributions are set to rise in April 2022. As such, 66% of UK adults recently reported that their cost of living had gone up in the past month.
Such considerable increases in the cost of living are putting a huge strain on finances, causing extreme worry and problem debt.
If you are worried about paying your energy bills and are struggling with the overall cost of living we are here to help. Read our help with energy bills guide to see what support is available to you and how best to combat rising prices.
If you are falling behind with your energy payments and are falling into problem debt, we can offer free online debt advice to help you get back on track. Complete our online debt advice tool to find out the best debt solution for you.