Households set to be hit by energy bill increase

New research by finance specialists, RIFT, has shown that UK households could save a considerable sum by locking in a fixed tariff on their household energy, as while the average bill has reduced in recent months, it's set to climb as we head towards winter.

RIFT analysed the energy price cap and average dual-fuel energy bill paid by UK consumers, how this cost has changed in recent months and how it's expected to change by the end of the year.

The research shows that: -

This time last year (Q3 2023), the average annual household energy bill sat at £1,976.

This cost has been largely in decline ever since and currently stands at £1,568 per year in Q3 2024.

In fact, the average annual dual-energy bill has reduced by 7.2% or £122 in the last quarter alone (Q2 2024 vs Q3 2024) and now sits some 20.6% below this time last year - an annual drop of £408.

This means that households are finally benefitting from more affordable energy bills after the prolonged cost of living crisis and, as it stands, the current energy price cap and average bill of £1,568 equates to 4% of the average household income.

But this respite isn't set to last for long.

In fact, the energy price cap and average annual dual-fuel energy bill is forecast to climb to £1,723 during the final three months of this year as we head into winter.

Whilst this remains below the high cost of £1,976 seen this time last year, it will mark a 9.9% increase compared to the current cost of running a home, adding £155 to the average household's energy bill.

As a result, RIFT forecasts that the proportion of household income required to run a home will climb to 4.4%, and when adjusting earnings for inflation.

Bradley Post, MD of RIFT, commented:

"The cost of living crisis has been a prolonged thorn in the side of the nation's households and high energy bills have been one of the contributing factors in this.

So many households may have finally been able to breathe a sigh of relief having seen a reduction in their tariff in recent months. Unfortunately, this respite isn't set to last and energy bills are set to climb once again come the end of summer.

Whilst this increase may not be as dramatic, it could still place pressure on those households in the toughest financial spots and so the best course of action is to see if you can lock in a fixed tariff now, before prices start to climb."