Combined electricity and gas unit costs for households rose by between 23% and 27% overnight on Friday 1 October 2022, according to analysis by the End Fuel Poverty Coalition, an independent campaign group1. The increase applies to the unit price of energy, not to the total bill, and the exact figure depends on how a household pays and where in the country it lives1.
The Government's Energy Price Guarantee caps the cost per unit that households pay, but actual bills are still determined by how much energy is consumed1. The Coalition's figures show the largest percentage rises falling on gas units. For direct debit customers, the gas unit rate rose from 7.37p per kWh to 10.3p, an increase of 39.76%, while the electricity unit rate rose from 28.34p to 34p, up 19.97%1. Standing charges rose far less: gas standing charge from 28.49p to 27.22p on the Coalition's table, and electricity standing charge from 46.36p to 45.34p1.
When standing charges are included, the Coalition calculates that households on standard credit pay 12% more and those on prepayment meters 11% more than those on direct debit1. Its table gives the combined cost of one unit of each fuel as 44.3p on direct debit, 43.71p on prepayment and 47.92p on standard credit, against 35.71p, 35.47p and 37.61p respectively before 1 October1.
The Energy Bills Support Scheme lowers bills by GBP400 in the short term, but that saving expires in April 2023, which the Coalition says creates a fresh hike in people's bills1. Additional support for households on benefits, in place since May 2022, also expires early in 20231. The Coalition estimates the number of UK households in fuel poverty will rise from 7 million on 1 October to nearer 8 million from 1 April 2023 as the support scheme runs out1.
"The Government has created a double dose of pain for households. Many will be hit with the rising energy bills immediately, with another dose of pain inflicted when the financial support runs out by April 2023."
On energy efficiency, more than GBP1bn of additional funding was pledged in the mini-Budget to improve insulation of homes over the next three years, which the Coalition says falls far short of the additional GBP5bn of energy efficiency investment needed1. Asthma + Lung UK reported that calls to its helpline from people needing advice on finances or benefits rose by 89% year on year, comparing August 2021 with August 2022, with website traffic on those topics up 63%1.
Why it matters for households
The guarantee limits the price of each unit, so a home's bill still tracks how much gas and electricity it uses. A household that consumes the same amount as last winter pays more, and the Coalition's figures show the increase landing hardest on gas units, which most homes use for heating. Standing charges, which are paid regardless of consumption, rose only slightly on these figures, so the fixed part of a bill changed little while the variable part moved sharply.
The gap between payment methods matters because it is a difference in cost for the same energy. Prepayment customers, who are often on lower incomes, paid more per unit than direct debit customers before 1 October and continued to do so after, though the Coalition's table shows the percentage uplift from direct debit narrowing slightly, from 13.62% to 11.31%1. Regional variation in unit rates is covered in the site's guide to electricity and gas unit rates by region, and the longer trend in domestic prices is set out in UK domestic energy prices over time.
For a household's energy independence, the practical point is that the unit rate is now set by government rather than by the wholesale market, and that arrangement is time limited. The Energy Price Guarantee is a closed scheme, and the support payments that accompany it are separate and shorter lived. How wholesale costs feed through to bills is explained in wholesale gas and electricity prices and why bills change, and the relationship between bill levels and reliance on imported gas is covered in energy bills and energy independence.
What happens next
The Energy Bills Support Scheme saving of GBP400 expires in April 2023, and support for households on benefits that has run since May 2022 expires early in 20231. The Coalition projects fuel poverty rising to nearer 8 million households from 1 April 20231. No further measures have been reported.
Sources1 cited
- Homes to see energy prices surge overnight - End Fuel Poverty Coalition, endfuelpoverty.org.uk