Energy News

One in three Brits can’t afford their energy bills

Thursday 6th October, 2011

By Martin Fagan

The UK is on the brink of an energy affordability crisis as average household bills hit £1,293 a year, new research says

Price hikes and the £200 billion bill for the government’s carbon reduction plans is driving Britain to the brink of an affordability crisis for household energy, according to new research.

Almost a third of UK consumers (32%) say that energy is already unaffordable, while 69% say the government has failed to strike the right balance between “greening” energy supplies and households being able to afford energy.

The government is pushing ahead with a £200 billion investment programme that includes the cost of cutting carbon and switching to renewable generation. This cost is being passed on to energy companies who are passing it on to customers in the shape of higher bills.

But after a year of hefty price increases, which has seen the average household energy bill hit £1,293 a year, 28% of households are struggling to afford their energy bills, according to the research by uSwitch.com, a price comparison and switching service.

The research suggests there is an ”affordability ceiling” and the tipping point is when bills hit £1,500 a year. uSwitch.com says the UK is only a small step away from seeing this - the average household energy bill would only need to increase by £207 or 14% for the average bill to hit the £1,500 “affordability ceiling”.

"The facts speak for themselves - almost seven million households are already living in fuel poverty, a third of people are saying that energy is already unaffordable in the UK and over a quarter already struggling to afford their bills,” said Ann Robinson, director of consumer policy at uSwitch.com.

“And sadly that isn't the end of it - we’re facing a £200 billion shopping list of investment required to secure our longer term supply, cut carbon, boost energy efficiency and roll-out smart metering into all homes. Unfortunately for consumers, British households can expect to be footing the bill.”

Responding to the research, Richard Lloyd, executive director at Which?, said: "The overwhelming majority of people tell Which? that the price of gas and electricity is their biggest financial worry. The rising cost of living has already forced almost half of us to cut back on essentials, and this was before some of the recent energy price hikes had even taken effect.

“It's now vital that the government and energy suppliers work together to help consumers manage their energy bills this winter."

However, Brits have yet to be convinced that the high price of developing renewable energy is a price worth paying, and uSwitch says this worry is putting people off buying energy efficient products - 11% of consumers think energy efficient products are too expensive and the extra expense outweighs any savings.