Energy bill increase to reach £32 per month
We all expected our household energy bills to go up once we were confined to our homes day in and day out by social distancing rules, but a new survey has finally put a price on this extra home energy usage.
The new research, published by our fellow comparison site comparethemarket.com, has estimated that UK households’ energy bills are set to rise by an average of £32.31 per month.
Energy bills rise as people work from home
The nationwide lockdown brought about by the Coronavirus outbreak has meant an increase in the use of household appliances such as televisions, ovens, dishwashers and lighting, as people spend all day in their houses working from home.
A monthly increase of over £30 represents a significant increase, and if social distancing measures force people to work from home in the longer term it would mean an annual increase in the average household energy expenditure from £1,034 to £1,421. This is a yearly increase of £387!
For many people, this increase is offset by the money they’re saving by not being able to eat out or travel during the lockdown period. A lucky few will even be saving money at the moment.
However, for those on lower incomes who could not afford luxuries like eating out or travelling so often,, the increase in their energy bills has come as a nasty shock and many will be struggling to afford it.
Are you at risk of fuel poverty?To find out what fuel poverty is, where it’s most common and how to get yourself out of it, see our guide to fuel poverty.
The survey showed that more than two-thirds of the 2,000 people asked had reported an increase in their energy usage since the lockdown started. Almost half of those surveyed said they were worried about their bills becoming unaffordable.
More than a third of households surveyed say they are turning down their central heating during the day in an attempt to control their spending, and over a quarter are limiting how much lighting they use.
We would suggest that, instead of limiting your usage, you should consider switching supplier. If you’re one of the millions of UK households that are on their provider’s least-competitive standard variable tariff, you could save around £362 by switching - about as much money as the average household is paying more than usual during the lockdown.
Ofgem’s response to the crisis
Ofgem, the energy market regulator, has demonstrated its concern about the situation and what it will mean for the most vulnerable households by temporarily reducing its price cap on standard bills as early as the 1st of April. The new cap will remain in place for six months while the country attempts to weather the silent storm that is COVID-19.
Unfortunately, however, the new price cap made only a tiny dent in the cost of a family’s energy expenditure. The price of the average dual-fuel energy bill for around 11 million households on a standard variable tariff fell by just £17 - from £1,179 to £1,162 - for the whole year.
The price cap already being in place also means that the average increase of £32 per month comes in spite of this reduction. Consumers are, it seems, left only with the solace that the increase could be £33 per month...
Worst of both worlds
Even though UK household energy bills are going through the roof, the country can take no comfort from the fact that at least one industry seems to be doing well out of the lockdown measures. As we have previously reported, our overall energy demand nationwide has actually gone down since the beginning of the lockdown.
A substantial decrease in industrial and commercial activities (i.e. the closure of office buildings and factories) has brought down the demand for electricity by 10%. The fall in demand from this sector, normally much more energy-hungry than the domestic sector, has taken its toll on the overall demand.