RESEARCH SHOWS THAT BRITS WOULD FOREGO A WHITE CHRISTMAS AS ENERGY BILLS RISE
Almost seven in 10 Britons (68 percent) hope for a white Christmas each year
However, 62 percent admit they would prefer a warmer Christmas this year if it meant they could save money on their heating bills
Almost three quarters (74 percent) will consider using the heating less during the festive season in order to save money
Ever since Bing Crosby hit the airwaves in 1942 with Irving Berlin’s nostalgic song, ‘White Christmas’, snow-laden vistas and frosted windows have defined the perfect festive setting for many of us.
Yet whilst almost seven in 10 Britons (68 percent) continue to hold out hope for a snowy Christmas, new research has revealed that 62% would actually prefer a warm Yuletide if it meant they could save on their dreaded winter heating bills this year.
The research by home heating expert Alpha Heating Innovation comes as the collapse of further energy firms is predicted for the coming weeks, following the 22 suppliers which have already folded since September 2021.
With the energy price cap now expected to rise by over 40% next April, the UK is bracing itself for an increase in household bills and looking for ways to conserve home running costs.
As a result, almost three quarters (74 percent) would consider using the heating less during the festive season in order to save money.
Darran Smith, Technical Manager for home heating expert, Alpha Heating Innovation, commented: “With gas prices set to radically increase in 2022 and fuel poverty likely to extend far beyond the four million households already struggling to pay their energy bills, it is little wonder that most of us would happily forego a white Christmas.
“We are urging households to consider ways of keeping their heating bills manageable over the festive period and look to establish some good home heating habits now before the price hikes arrive.”
When it comes to the nation’s Christmas finances, a warm home features in the top three items which UK households prioritise (38 percent), along with presents for friends and family (53 percent) and festive food (52 percent).
The top 10 things Brits prioritise financially over the Christmas period:
1. Lovely presents for friends and family (53%)
2. Festive food (52%)
3. A warm home (38%)
4. Trees and decorations (29%)
5. Christmas lights (26%)
6. Alcohol (24%)
7. Posting gifts/cards (17%)
8. Days out (14%)
9. Nights out (13%)
10. Hosting Christmas parties (12%)
But there’s good news. Whilst gift budgets can be set and purse strings for food tightened, there are simple and efficient ways to save on heating bills without compromising on comfort.
Darran continues: “One of the best ways to heat your home economically is to learn how to control the settings of your heating system so it delivers the optimum temperature for your lifestyle and comfort level, while ensuring you only use the energy you need.
“Don’t waste energy on heating the whole house all night. If you have thermostatic radiator valves, turn them down or off in rooms that aren’t regularly used. Think about what room temperature you normally set and reduce it by just 1ºC – you won’t notice any difference but you can cut heating bills by up to £105 a year in a typical home.
“And finally, put on an extra layer such as that festive must-have: the Christmas jumper. Very simple; but it never fails to make a surprisingly big difference.”
For more practical tips on how to save on heating bills, visit:
Citizens Advice Scotland has launched our Big Energy Saving Winter campaign, which encourages people to get advice amid soaring energy prices (writes CAS Chief Executive DEREK MITCHELL).
It comes after months of turmoil in the energy market, with Bulb being the biggest supplier so far to go out of business. The spike in global gas prices saw suppliers sell energy at unsustainable losses and that has led to a shrinking of the market, meaning not only less consumer choice but also bigger bills.
In October the energy price cap, put in place to protect consumers, rose by a record amount, just as people faced a perfect storm of rising inflation and falling incomes due to things like the reduction of Universal Credit by £20 per week.
As we reveal, this all adds up to more than 1 in 3 of us finding bills unaffordable.
In polling for CAS by YouGov, people blamed rising energy prices and the cost of living, but also hard to heat homes and low incomes. Given there’s likely to be another rise in the Spring which on average will add around another £500 to bills, this situation will only get worse.
When we speak about energy bills in the winter, and Scotland’s unacceptable levels of fuel poverty, you’ll often see the cliché around “heating or eating”. But what feels like a cliché in the pages of a newspaper is the reality for too many people. 1 in 4 households were in fuel poverty before the pandemic, and as the snow begins to fall in parts of Scotland they face an incredibly rough winter.
In previous years this campaign would have encouraged people to “switch and save”. But due to the crisis in the market, the official advice is not to switch as many people will end up on a higher tariff.
Our campaign is about offering people solutions. Because that’s the good news: there is real help available. We want to ensure that people know they don’t have to feel powerless in the face of soaring bills.
There are various ways we can help them save energy, that’ll have the benefit of saving the planet as well – something to consider with COP 26 fresh in our minds.
CABs can also unlock money for people through things like social security, employment entitlements and debt reductions. In fact during the pandemic our network unlocked around £147m for people in Scotland.
So our campaign is all about making people aware of this help so they can access it.
You’ll possibly see your local CAB out in your community in the next few weeks, pushing the same message. Hopefully we’ll manage to provide some relief to at least some of the people who are suffering the cold.
So please help spread the message of our campaign. Tell your friends and family about it, re-tweet us (@citadvicescot), and if you’re in a position to amplify it in any other way, please do.
In the longer term, we need policies ensure consumers are protected and bills don’t eat up as much of people’s household income.
Until then the CAB network is here to help, as we have for over 80 years.
An additional £18 million will be available this year to help householders install energy efficient measures and reduce their heating bills, bringing the total support available through Home Energy Scotland to £50 million in 2021-2022.
People in Edinburgh and across the country are being urged to seek support and advice from Home Energy Scotland to help make their homes warmer and reduce their heating bills, on average by up to £300 per year.
Financial support worth up to £5,000 is also available to make homes more energy efficient through improvements like home insulation or a new heating system.
Home Energy Scotland also supports households with practical advice and, where appropriate, install energy efficient measures – making homes more energy efficient and saving householders money.
Minister for Zero Carbon Buildings Patrick Harvie, said:“As the colder weather returns and given the concern around rising energy bills, we want to ensure people living in Edinburgh and around Scotland are aware of the support available to keep their homes warm this winter.
“Home Energy Scotland offers advice, support and funding to help people make energy saving improvements, helping them reduce their energy costs.
“The free impartial advice and support is available for anyone concerned about paying their energy bills and we would urge people struggling with their fuel bills to get in touch with Home Energy Scotland.”
Recent research by Home Energy Scotland shows that 70% of people in Scotland feel concerned about energy bills rising, with almost two thirds using more energy than usual during the first 12 months of the pandemic. The research also found that 59% of Scots have noticed a worrying rise in their energy bills already.
Harry Mayers, Head of Home Energy Scotland said:“24,000 households across the country including Edinburgh have already benefited from new energy efficient measures, like a new heating system or insulation, by getting in contact with Home Energy Scotland.
“But with people spending more time at home over the past 18 months due to coronavirus, energy usage has been greater than ever. We therefore want to be able to help even more people to make energy saving improvements to their home.
“A home that isn’t well insulated can lose more than 50% of its heat through its roof and walls so making improvements can help your finances and make your home more energy efficient, comfortable and cheaper to heat while helping lower emissions in Scotland”.
£41 million Winter Support Fund for low income households
Funding to help people struggling financially during the winter is part of a new £41 million support package. The Winter Support Fund will help those on low incomes, children and people at risk of homelessness against a backdrop of rising living and fuel costs.
The funding comes from consequentials of the UK Government’s £500 million Household Support Fund.
Key elements of the package include:
£10 million to help people who are struggling to pay fuel bills
£25 million flexible funding to help local authorities support wellbeing and respond to financial insecurity based on local needs
£6 million for third sector partners to support low income families
Social Justice Secretary Shona Robison said: “We know that many families are struggling financially due to the increased costs they are facing right now. This package of measure aims to ease some of that strain by providing direct support to people.
“The Scottish Government has invested £2.5 billion to support low income households in 2020-21, with around £1 billion focused on supporting children as a cornerstone of our national mission to tackle child poverty and homelessness.
“That includes doubling the Scottish Child Payment to £20 per child per week, with our plans to do so set out in the forthcoming Scottish Budget.
“We are passing on every penny of the £41 million we received in UK Government consequentials.
“However, this in no way makes up for the recent £20-a-week cut to Universal Credit, which has taken an estimated £460 million from the pockets of the people in Scotland who need it most.”
Support for those struggling with fuel bills will include access to fuel top-up vouchers, advice to manage fuel debt and support for those in remote and rural areas.
The Winter Support Fund will continue to promote cash-first responses in line with our draft national plan on ending the need for food banks as a primary response. In some cases help may also be offered to tackle social isolation and support mental health.
In addition to helping people heat their homes and meet rising food costs, funding will help to ensure no-one is faced with rough sleeping this winter.
The funding comes from consequentials of the UK Government’s £500 million Household Support Fund.
Tranent-based thermal energy storage firm Sunamp has been awarded over £396,000 from SP Energy Networks’ Green Economy Fund to deliver innovative micro-district heating networks, which will reduce heating bills for fuel-poor and vulnerable people while also decreasing carbon emissions in Edinburgh.
The funding from SP Energy Networks’ Green Economy Fund has enabled Sunamp to provide five, micro-district heating networks that will produce low carbon heating for more than 50 Edinburgh residents.
The pioneering micro-district heating system aims to save over 75% on carbon emissions compared to gas boilers as well as providing the opportunity to recover heat from buildings with large occupancy and high passive heat gains in order to transfer it to the Edinburgh properties requiring heat.
Sunamp is being funded as part of SP Energy Networks’ £20 million Green Economy Fund, which supports the UK and Scottish Government’s ambitious plans to meet climate change targets. The fund also aims to boost local economic growth, improve air quality across the country and deliver a better future, quicker for all.
SP Energy Networks is part of the ScottishPower group, a Principal Partner for the United Nations Climate Change Conference (COP26) to be held in Glasgow in November.
It is developing an energy model that will play a significant role towards reaching the UK’s world-leading climate change targets and is investing a total of £10 billion in the clean energy generation and networks infrastructure needed to help the UK decarbonise and reach Net Zero emissions.
Frank Mitchell, CEO at SP Energy Networks, said: “Our Green Economy Fund is committed to ensuring that no one is left behind on the road to net zero emissions and this project provides critical support to local communities that are affected by fuel poverty.
“We know that Sunamp micro-district heating systems will make a significant difference to vulnerable residents in Edinburgh by making homes more energy efficient and bringing costs down so residents can keep their homes warm ahead of the winter months.
“We’re very proud to be funding this innovative project and supporting energy projects focused on tackling the decarbonisation of heat.”
Andrew Bissell, Sunamp Chief Executive:“SP Energy Networks and Sunamp share a vision of a world powered by affordable and sustainable energy. We couldn’t be more grateful for the support we’ve received from the Green Economy Fund as the new micro-district heating networks will provide heat to some of the most vulnerable people in Scotland’s capital.
“Sunamp is passionate about making buildings more energy efficient, sustainable and self-sufficient, whilst also reducing carbon emissions and SP Energy Networks’ funding has supported us in transforming how we heat and cool our buildings going forward”.
So far, 35 projects have been awarded funding from SP Energy Networks across Central and Southern Scotland.
GB energy consumers face the biggest ever increase to the energy price cap
Fuel poverty charity National Energy Action (NEA) warns that the average increase of £153 for prepayment customers and £139 from those paying by direct debit using a default tariff is likely to result in more utility debt, 500,000 extra households in fuel poverty and an increase in preventable deaths this winter
Suppliers are putting their prices up in October when millions of people will see a reduction in their incomes, as uplifts to Universal Credit are withdrawn
Charity says new Household Support Fund welcome but not enough to prevent needless deaths this winter
Calls on UK Government to take more action to directly reduce higher prices for the poorest this winter and for Ofgem to do more to protect the most vulnerable consumers when suppliers fail.
Adam Scorer, Chief Executiveat fuel poverty charity National Energy Action (NEA), said: “The massive devastating increases in energy prices will drive over 500,000 more households into fuel poverty, leaving them unable to heat or power their homes.
“Just when they were needed most, the uplifts to Universal Credit are also being withdrawn and inflation is soaring. The new Household Support Fund will provide some welcome support for those who can access it, but on its own it is not enough to halt the erosion in incomes and deal with rising prices.
“Without a wider package of support – keeping UC uplifts and more rebates to protect those on the lowest incomes from spiralling energy prices – vulnerable people are still at dire risk of premature death this winter”.
“Falling through the gaps when suppliers fail”
NEA warns that the current crisis is likely to badly affect vulnerable customers when their suppliers fail. The charity is warning that households on older prepay meters are at risk of not being able to top up with their new supplier if their current supplier fails.
In addition, people in debt who transfer over to their new suppliers may also immediately risk aggressive debt recovery tactics from their previous suppliers’ administrators. People eligible for Warm Home Discount are also falling through the gaps when they move to their new supplier. They often can’t access all elements of this vital support.
Adam Scorer continued: “We know this situation is preventable, but Ofgem must act fast to protect the most vulnerable consumers when suppliers fail. The UK Government must also use the upcoming Budget to provide more additional emergency support so we can guard against the consequences of soaring bills and hits to millions of low incomes.
“This means enhancing current schemes and taking new steps to accelerate the repayment of utility debts across the UK”.
“Many of those on the lowest incomes live in the least efficient homes”
NEA has also stressed that one of the key reasons the situation is bleak for the poorest households is the vicious overlap between the households who live on the lowest incomes and who also live in the least energy efficient homes.
They say in England alone, more than 680,000 households on the lowest incomes also live in the least efficient homes making the impact of the price rises much more severe. Over 3 million fuel poor households will need to be prioritised for retrofits if the goal to meet Net Zero is to be met at the same time as statutory fuel poverty targets.
Adam Scorer again: “These quick emergency fixes are vital to get struggling households through this winter, but we can’t lose sight of the long-term solution to reduce the energy waste in our homes.
“We have some of the least efficient housing in Europe. This has left the UK more exposed to the current soaring gas price than many other countries and we are wasting billions of pounds each year as heat escapes through leaky roofs, floors and ceilings”.
What needs to be done
As a summary, NEA is proposing emergency provision to help fuel poor households to stay warm at home this winter, including:
Providing additional funding towards the Warm Home Discount scheme this winter as an emergency provision to guard against significantly increased gas prices
Supporting more households with the Winter Fuel Payment, especially for those eligible for the Cold Weather Payment in Northern Ireland
Helping accelerate the repayment of utility debts across the UK by enhancing Fuel and Water Direct
Continuing the Winter Grant Scheme through this winter
Additionally, through the Spending Review, NEA propose the following longer-term actions to ensure that fuel poor households can be warm at home for years to come:
Fully implement the Conservative Manifesto for the Home Upgrade Grant Scheme (HUG) and Social Housing Decarbonisation Fund (SHDF)
Ensure the Shared Prosperity Fund (SPF) helps end cold homes across the UK
Extend and strengthen the £20 a week uplift in Universal Credit and Working Tax Credit for low-income households.
Vital plans to invest at least £1.8 billion to make buildings in Scotland net zero were endorsed by parliament this week, just as gas prices surge, threatening to push many more families across the country into fuel poverty.
Figures show that a quarter of households in Scotland are already considered to be in fuel poverty. Scottish Greens Lothian MSP Lorna Slater has said that as well as the need to tackle the immediate problem, the issue shows that the requirement to lower Scotland’s climate emissions goes hand in hand with tackling fuel poverty.
Scottish Greens co-leader and Lothian MSP Lorna Slater said: “The surge in gas prices is a real concern to so many people who rely on fossil fuels to heat their homes, and, yet again, demonstrates why we must end our dependency on volatile, unreliable and climate-destroying fossil fuels.
“That’s why we are accelerating plans to make homes across Scotland more efficient and to switch from fossil fuels to renewable alternatives. To support this, we will invest at least £1.8bn over the next five years.
“It has been galling to see Boris Johnson preach climate responsibility on the world stage while his government is forcing families into poverty in Lothian and beyond. All the while he is doing nothing to decarbonise heating and transport.
“We don’t have time for this kind of reckless approach, which is why, with Greens in government, Scotland will take a different path.”
The UK Government sets out the background to the issue of wholesale gas prices and the action the it is taking to protect the UK’s energy supply, industry, and consumers:
There has recently been widespread media coverage of wholesale gas prices, and the effect this could have on household energy bills. The impact on certain areas of industry, and its ability to continue production, has also attracted attention.
This explainer sets out the background to the issue and the action the government is taking to protect the UK’s energy supply, industry, and consumers.
Natural gas prices have been steadily rising across the globe this year for a number of reasons. This has affected Europe, including the UK, as well as other countries around the world.
We have a diverse range of gas supply sources, with sufficient capacity to more than meet demand. The UK’s gas system continues to operate reliably and we do not anticipate any increased risk of supply emergencies this winter.
Why are there high global gas prices?
The prices that are currently visible reflect the high value being placed on gas at the present time, with prices being determined by global supply and demand. They are not necessarily representative of pre-existing contracts and therefore do not apply to all of the gas being consumed in the UK this winter.
Current prices reflect a number of factors including:
as the world comes out of COVID-19 lockdowns and economies reopen, we are seeing an uptick in global gas demand this year. *combined with a cold winter (which has an impact on gas demand as gas is often used for heating homes) this has led to a much tighter gas market with less spare capacity
in particular, high demand in Asia for Liquified Natural Gas (LNG), natural gas transported globally by ship, means less LNG than expected has reached Europe *some essential maintenance projects rescheduled from 2020 due to coronavirus coincided with necessary scheduled projects in 2021, while weather events in the US have adversely affected their LNG exports to Europe
How are high global gas prices impacting the UK?
The gas market is crucial to the UK’s energy supply because of its significance in heating, industry and power generation.
Over 22 million households are connected to the gas grid and in 2020, 38% of the UK’s gas demand was used for domestic heating, 29% for electricity generation and 11% for industrial and commercial use.
High gas wholesale prices have subsequently driven an increase in wholesale power prices this year.
In recent weeks, this trend has been exacerbated by the weather and planned maintenance at some power stations. This has resulted in unusually low margins for this time of year. These factors have combined to cause spikes in wholesale electricity prices, with a number of short-term markets trading at, or near, record levels.
While we are not complacent, we do not expect supply emergencies this winter.
Is our gas supply at risk?
The Great Britain (GB) gas system has delivered securely to date and is expected to continue to function effectively, with a diverse range of supply sources and sufficient delivery capacity to more than meet demand.
While our largest single source of gas supply continues to be the UK Continental Shelf (approximately 48% of total supply in 2020), the maturity of that source means we have to supplement supply from international markets.
Whilst the diversity of those international sources promotes our energy security, by reducing reliance on a particular source, the UK – as with other nations – is exposed to global trends in supply and demand which affect the price of gas traded at UK’s market hub (the National Balancing Point).
We have a wide range of supply sources including direct pipelines across the North Sea from Norway to the UK, our single biggest source of imports. We are also investing millions into scaling up strong renewable energy capacity and driving down demand for fossil fuels.
GB also has a number of gas storage facilities that act as a source of system flexibility when responding to short-run changes in supply and demand.
What is the government doing on this?
Energy security is an absolute priority for this government. The government works closely with the regulator and gas supply operators to monitor supply and demand.
While wholesale gas prices have increased internationally this year, the market continues to balance supply and demand through adjusting the prices at which energy trades take place. We have no reason to suggest this will not continue but will monitor the market.
National Grid Gas has a number of tools at its disposal to mitigate the risk of a gas supply emergency, including requesting additional gas supplies be delivered to the National Transmission System. Together with the Department for Business, Energy and Industrial Strategy (BEIS), National Grid Gas has robust response plans in place in the unlikely event that risk should materialise. Read plans for network gas supply emergencies.
Will this affect energy bills?
The high wholesale gas prices that are currently visible may not be the actual prices being paid by all consumers.
This is because major energy suppliers purchase much of their wholesale supplies many months in advance, giving protection to them and their customers from short-term price spikes.
The Energy Price Cap is also in place to protect millions of customers from the sudden increases in global gas prices this winter. Despite the rising costs of wholesale energy, the cap still saves 15 million households up to £100 a year.
The current global wholesale gas price situation as set out above could have an effect on companies.
Companies without longer-term contracts may face higher costs, but we expect that companies with longer-term contracts in place may have little exposure to the current high wholesale prices. If there were an event where a supplier fails, Ofgem would work to ensure that customers are moved to a new supplier, so they are not without energy.
How is the government helping poorer households?
Our Energy Price Cap will protect millions of customers from the sudden increases in global gas prices this winter.
We are also supporting low income and fuel poor households with their energy bills in a number of ways which demonstrates the government’s commitment.
This includes through:
the Warm Home Discount which provides eligible households with a £140 discount
in addition, Winter Fuel Payments and Cold Weather Payments will help ensure those most vulnerable are better able to heat their homes over the colder months
Vulnerable people and anyone in financial distress during this time should talk to their energy supplier, who will be able to discuss personal circumstances and consider options to help, including reassessing, reducing or pausing payments. Emergency measures have been agreed between government and energy suppliers to support those most in need during the disruption caused by COVID-19, and this agreement remains in place this winter. Read details of the agreement.
As set out in the Energy white paper, we plan to extend the Warm Home Discount until 2026, increase it to £150, and help an extra 780,000 pensioners and low-income families with their energy bills. With a total of 2.7 million to get support, with the vast majority to receive the money back automatically, without having to apply as at present.
Cold Weather Payments provide vulnerable households on qualifying benefits with financial support when the weather has been, or is forecasted to be, unusually cold. £25 is available for eligible households for each 7 day period of very cold weather between 1 November and 31 March.
Business and Energy Secretary meets and energy industry chiefs
Business and Energy Secretary Kwasi Kwarteng held a series of individual meetings with senior executives from the energy industry yesterday to discuss the impact of high gas prices, driven by international supply and demand factors.
During the calls, the Secretary of State was reassured that security of supply was not a cause for immediate concern within the industry. The UK benefits from having a diverse range of gas supply sources, with sufficient capacity to more than meet demand. As previously stated, the UK’s gas system continues to operate reliably and we do not anticipate any increased risk of supply emergencies this winter.
The Secretary of State stressed that energy security is an absolute priority for this government. We are confident that security of supply can be maintained under a wide range of scenarios. Great Britain also benefits from a diverse electricity mix, which is one of the reasons why we have one of the most reliable electricity systems in the world.
Whilst our largest single supply source of gas continues to be from domestic production – and the vast majority of imports come from reliable suppliers such as Norway – the UK’s exposure to volatile global gas prices underscores the importance of the government’s plan to build a strong, home-grown renewable energy sector to further reduce our reliance on fossil fuels.
The pressure being faced by some energy companies was also discussed during the meetings after four small suppliers ceased to trade in recent weeks. Ofgem has robust measures in place to ensure that customers do not need to worry, their needs are met, and their gas and electricity supply will continue uninterrupted if a supplier fails.
If the appointment of a Supplier of Last Resort is not possible, Ofgem and the Government have agreed processes in place to appoint a special administrator to temporarily run the business until such time as a new supplier can be found for the customers.
The Secretary of State also stressed the importance of protecting vulnerable customers during a time of heightened global gas prices. Government initiatives such as the Warm Home Discount, Winter Fuel Payments and Cold Weather Payments will help ensure those most vulnerable are better able to heat their homes over the colder months. The Energy Price Cap is also in place to protect millions of customers from the sudden increases in global gas prices this winter.
The Business Secretary will be meeting with Ofgem this morning to discuss the issues raised by the industry in more detail, and on Monday he will convene a roundtable with industry to plan a way forward.
The Secretary of State is also working in contact with colleagues across government to manage the wider implications of the global gas price increase.
Customers encouraged to contact supplier for support and switch to better deal if possible
Support available for customers struggling to pay bills or in vulnerable circumstances with additional help for those on prepayment meters
Energy suppliers sign up to industry commitment to reach out to those who most need help this winter
Customers can avoid the increase by shopping around or asking their supplier to put them on a better deal
The energy price cap will increase from 1 October for the 15 million customers it protects. Those on default tariffs paying by direct debit will see an increase of £139 from £1,138 to £1277. Prepayment customers will see an increase of £153 from £1,156 to £1309.
This increase is driven by a rise of over 50% in energy costs over the last six months with gas prices hitting a record high as the world emerges from lockdown.
Surging global fossil fuel prices are already driving up inflation for consumers, making fixed rate energy tariffs not covered by the price cap, as well as petrol and diesel more expensive.
The price cap offers a safety net for customers who haven’t switched by making sure that suppliers only pass on legitimate costs.
Those on default tariffs are saving an estimated £75-£100 or £1 billion every year as a result.
Any customer in vulnerable circumstances or worried about paying their energy bill should contact their supplier to access the support available.
Customers may be eligible for extra help such as affordable debt repayment plans or payment breaks, emergency credit for prepayment meters and a £140 bill rebate under the Warm Home Discount.
Last week suppliers also signed up to an industry commitment to reach out to those who most need help this winter.
Customers can also shop around to save money before the increase takes effect on 1 October.
Those who don’t want to switch supplier or are unable to can ask their supplier to put them on a better deal.
Jonathan Brearley, chief executive of Ofgem, said: “Higher energy bills are never welcome and the timing and size of this increase will be particularly difficult for many families still struggling with the impact of the pandemic.
“The price cap means suppliers only pass on legitimate costs of supplying energy and cannot charge more than the level of the price cap, although they can charge less.
“If you’re struggling to pay your bill you can get in touch with your supplier to access the help that’s available and if possible, shop around for a better deal.
“We have put tough rules in place to ensure suppliers treat customers who are struggling with bills fairly, and welcome their commitment to reach out to those who most need help this winter. Where help is not forthcoming, we will not hesitate to act.
“I appreciate this is extremely difficult news for many people, my commitment to customers is that Ofgem will continue to do everything we can to ensure they are protected this winter, especially those in vulnerable circumstances.”
Ofgem adjusts the price cap twice a year based on the latest estimated costs of supplying energy.
The biggest and most unpredictable factor is the wholesale cost of electricity and gas paid by suppliers and influenced by global markets. This accounts for roughly 40% of the overall price cap level.
Gas prices have risen to a record high in Europe due to a recovery in global demand and tighter supplies. This is increasing the cost of heating homes and pushing up electricity prices.
Last winter, the level of the cap fell by £84 after passing onto customers the savings from lower wholesale energy costs as countries went into lockdown and demand fell.
A programme to tackle fuel poverty and improve energy efficiency will receive an extra £9 million of funding this year to support a reduction in greenhouse gas emissions and help fuel poor households save money on their heating bills.
The Scottish Government’s Area Based Scheme (ABS) programme will provide over £64 million in 2021/22 – up from £55 million the year before – to enable every local authority in Scotland to deliver energy efficiency measures to fuel poor households and communities.
The work forms part of a £1.6 billion investment over the next five years to transform the heat and energy efficiency of buildings. The Scottish Government’s draft Heat in Buildings strategy sets out a vision for more than one million homes to be using low and zero emissions heating systems by 2030.
ABS projects have helped deliver energy efficiency improvements to more than 100,000 homes since the programme launched in 2013. That has generated cumulative savings for household fuel bills worth over £900 million while reducing CO2 emissions by over 3.4 million tonnes.
Local ABS projects plan to install low and zero emissions heating systems in more than 500 homes this year, as well as insulation and other improvements such as solar panels and battery storage.
Net Zero and Energy Secretary Michael Matheson visited Hillpark in Glasgow to announce this year’s ABS funding plans.
Mr Matheson said: “We are wholly committed to ending Scotland’s contribution to climate change and, crucially, doing so in a way that is fair for everyone and leaves no-one behind.
“Reducing emissions from heating our homes is one of the most important things we can do to ensure we become a net-zero society by 2045. It will require us all to take action and everyone across Scotland will need to play their part in making sure our homes and buildings are fit for a net-zero future.
“We are committed to rapidly scaling-up action, but doing so in a way that ensures that our fuel poverty objectives and our commitment to tackling climate change work together, ensuring a fair and just transition to net zero.
“I am pleased to confirm increased funding for this year’s ABS programme, which continues to support on-the-ground delivery of projects making a tangible and positive difference – not just to greenhouse gas emissions, but to people’s lives.”
Councillor Kenny McLean, City Convener for Housing, Neighbourhoods and Public Realm at Glasgow City Council, said: “The ABS programme in Glasgow has made a huge impact in many households in Glasgow, lowering energy bills and reducing carbon emissions.
“The increase in funding will allow continued economic, environmental and social benefits to be delivered as a result.”
Area Based Schemes are delivered by local authorities targeting fuel poor areas and communities. ABS funding also targets the `hardest to treat’ properties requiring external wall or complex cavity wall insulation, making homes warmer and less expensive to heat.
By leveraging investment by private and social landlords, ECO finance and Scottish Government funding, ABS projects have been particularly successful in delivering improvements for multi-occupancy properties such as flats and tenements, as well as whole streets.
