Ofgem CEO confirms energy price cap will surge to £2,800 in October
Parliament TV

With energy prices rising far beyond what people can afford already, the predictions for 2023 are starting to look even worse.

In the UK, energy regulator Ofgem sets a price cap which determines the maximum amount energy firms are allowed to charge customers per year.

It currently stands at £1,971, having gone up almost £700 in four months, but predictions by energy consultancy firm Cornwall Insight are now suggesting it could reach more than £4,400 next year.

Ofgem recently announced that it will review the energy price cap four times a year, rather than twice a year, which could affect the price of everyone’s household bills more frequently.

On Twitter, it was suggested that by 2023, utility bills could make up 15-25% of people’s pretax incomes based on the median family income.

The tweet read: “People get mad at me for pointing this out but the median family income in this country is ~£28.5k pretax and the London Living Wage is ~£18.5k pretax.

“So, we're looking at utility bills alone absorbing 15-25% of of the pretax incomes of people on median incomes.”

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The news left some to point out that campaigns like Don’t Pay UK, which is encouraging people to refuse to pay their electric bills, may not be a choice anymore. Charities have warned people against doing this.

One person wrote: “the thing a lot of critics of campaigns like Don't Pay UK don't seem to understand is for a vast proportion of people this won't be choice.

“When rent is 50% of your income (or more) and energy bills are 25% its not even activism, its just having no other options.”

Another concerned Twitter user wrote: “I'm no economist but surely people spending 25% of their income on energy is not good for local high streets.”

With the energy price cap set to rise to over £3,500 in October, it is feared many households will struggle to get through winter.

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The cost of living crisis has touched every corner of the UK, pushing families to the brink with rising food and fuel prices.

The Independent has asked experts to explain small ways you can stretch your money, including managing debt and obtaining items for free. https://www.independent.co.uk/life-style/cost-of-living-tips-advice-b2081583.html

If you need to access a food bank, find your local council's website using gov.uk.https://www.gov.uk/find-local-council and then use the local authority's site to locate your nearest centre.

The Trussell Trust, which runs many foodbanks, has a similar tool. https://www.trusselltrust.org/get-help/find-a-foodbank/

Citizens Advice provides free help to people in need. The organisation can help you find grants or benefits, or advise on rent, debt and budgeting. https://www.citizensadvice.org.uk/.

If you are experiencing feelings of distress and isolation, or are struggling to cope, The Samaritans offers support; you can speak to someone for free over the phone, in confidence, on 116 123 (UK and ROI), email jo@samaritans.org, or visit the Samaritans website to find details of your nearest branch.

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