A third rise in a row in energy bills is expected to be announced next week with water companies begging to hike bills even higher
Struggling households are bracing for more bad news as energy and water bills are set to rise again.
Electricity and gas bills are predicted to go up by £85 in April, according to a forecast. It would mean an increase in the typical household energy bill of £255 or 16% in just six months. Meanwhile, three of the UK’s largest water firms have urged regulators to allow them to charge customers even more than previously agreed.
Water bills are already set to rise by 26% – £123 for a typical household – this year. Council tax rises of up to 10% come into effect on April 1, though increases to the minimum wage, state pensions and benefits should lessen the pain. Dr Craig Lowrey, from researcher Cornwall Insight, said: “Households have been hit hard over the past few months, and the pressure is not letting up. While we’re not seeing a return to the peak of the energy crisis, the market is more volatile than it has been in quite some time and households are bearing the brunt of cold weather and low gas storage levels across Europe.”
Cornwall expects regulator Ofgem to reveal that the typical household energy bill will rise to £1,823 in April – the third consecutive rise since last summer. Energy bills are still more than 50% lower than their highest point in early 2023. Mr Lowrey said the rise is because of an increase in wholesale gas prices across Europe. He said this underscores the need for Labour’s push towards building more UK-based renewable energy.
Energy Secretary Ed Miliband said: “Energy bills are set to rise again due to a spike in global gas markets, with wholesale gas prices up 15% since the last energy price cap was announced. This will put up energy bills because of our reliance on global fossil fuel markets controlled by petrostates and dictators. This government is determined to get us out of the grip of global fossil fuel markets and bring energy security to our country.”
In December, Ofwat said it would allow water firms to raise bills by an average of £157, or 36%, over the next five years to help finance investment into crumbling infrastructure. But Southern Water, Anglian Water and South East Water yesterday asked the Competition and Markets Authority to reconsider bill increase plans.
Southern Water had already been allowed a 53% increase to average bills over the next five years. Anglian Water had been allowed 29% and South East Water had been granted 24%. But the firms have all argued that they need to lift bills by more than this in order to fund improvements and to meet environmental commitments.
Thames Water, the UK’s largest water supplier, last week called on regulators to allow it to push bills higher than the 35% rise it was allowed. Southern Water chief executive Lawrence Gosden said a 35% settlement: “Would not enable us to deliver the environmental and performance improvements and new infrastructure that our customers and communities rightly expect.”
Plans to restructure Thames Water have been approved by a High Court judge, allowing the struggling utility to stay afloat. The company was set to run out of cash as soon as next month. Yesterday, Mr Justice Leech approved a plan which provides a loan of up to £3billion with a 9.75% interest rate.
The fresh loan will fund Thames Water for another year but saddle it with another £800m in interest and fees. Thames Water chief executive Chris Weston said: “This is good news for our customers, puts our business on a firmer financial footing, and enables us to continue to invest in our network and deliver critical infrastructure upgrades for our customers and the environment.”
