Ofgem announced a new price cap on Friday 23 August 2024. Under it, a typical annual energy bill will be £1,717, which National Energy Action (NEA) says is 9% higher than it currently is1. NEA, the national fuel poverty charity working across England, Wales and Northern Ireland, published figures the same day showing the number of UK households in fuel poverty will rise to 6 million from October, up from 5.6 million currently1.
NEA uses a definition under which a household is in fuel poverty if it needs to spend 10% or more of its income on energy to maintain a satisfactory heating regime1. Its figures put the increase at 400,000 additional households1. The charity notes that energy bills fell slightly over the summer, a period when households typically use the least energy, and that the latest increase takes effect as temperatures usually begin to drop1. It also states that energy debt is at record levels, with customers owing over £3 billion, and that Ofgem has already confirmed those record debt levels1.
The charity links the rise to changes in the Winter Fuel Payment. It says an estimated 10 million pensioners now miss out on the payment, and that of those, Age UK says 2 million are vulnerable1. NEA states that around 880,000 eligible pensioners do not receive pension credit and are therefore cut off from the Winter Fuel Payment, and that low-income pensioners who just fail to qualify for means-tested benefits also miss out1.
"Struggling households are in the third year of an energy crisis. Even before the crisis, our clients had no slack in their budgets. Three years on, they are mired in record levels of energy debt and severely rationing their energy."
NEA says it is crucial that all eligible households are put on the means-tested benefits that unlock access to energy bill support1. Its chief executive, Adam Scorer, said there is still time for Ofgem and the UK government to act for those at greatest risk, and called for support to be extended beyond the hard edge of means-tested benefits1.
| Measure | Figure |
|---|---|
| Typical annual energy bill from October | £1,717 |
| Increase on current typical bill | 9% |
| Households in fuel poverty from 1 October | 6 million |
| Households in fuel poverty currently | 5.6 million |
| Additional households | 400,000 |
| Customer energy debt | over £3 billion |
| Pensioners missing out on Winter Fuel Payment | estimated 10 million |
| Eligible pensioners not receiving pension credit | around 880,000 |
Why it matters for households
The price cap sets a limit on unit rates and standing charges, not on the total bill, so what a household pays depends on how much energy it uses and how it pays. The £1,717 figure is a typical-household number rather than a cap on any individual bill, and the rates differ by payment method, including direct debit, prepayment and standard credit. For homes already rationing energy, a 9% rise in the typical bill arriving at the start of colder weather reduces the margin between what a household earns and what it must spend to stay warm, and record debt levels mean some are repaying arrears at the same time as paying for winter usage1. Energy independence at household level, in the sense of not being exposed to price movements and debt, is affected by both the level of the cap and whether support reaches the homes that need it. NEA's position is that the gap in support has grown for vulnerable households not on means-tested benefits1.
What happens next
The new price cap takes effect from 1 October 20241. NEA says there is still time for Ofgem and the UK government to act for those at greatest risk this winter, and calls for action to reduce debt levels and extend support beyond means-tested benefits1. No further dated steps are set out in the announcement.