The End Fuel Poverty Coalition estimates that 13.5 million households will now spend more than 10% of their income on energy, while nearly 5.5 million homes could spend around 20%. The new cap also increases electricity and gas unit rates.
UK Household Energy Price Climbs Again
The UK household energy price is set to rise from July 1. This places millions of families under even more financial pressure after months of volatility in global gas markets. It is also expected to push millions more households into fuel poverty ahead of the colder months.
Under the new price cap, a typical annual household energy bill will increase by more than £220, taking the equivalent annual cost to £1,862 under the regulator's previous calculation method. Using a newer methodology that assumes lower energy consumption, the average annual bill is estimated at £1,663. Despite the revised calculation, consumer groups warn that the higher tariffs will still have a major impact on household budgets.
Campaigners from the End Fuel Poverty Coalition estimate that around 13.5 million households will now spend more than 10% of their income on energy bills. This is up from approximately 11.3 million households recorded in April.
Spending more than a tenth of household income on energy is used as a measure of fuel poverty.
The coalition also warned that close to 5.5 million homes could end up spending around 20% of their income on energy costs, which is a big increase from the 4.3 million households estimated earlier this year. The figures, based on research conducted by the University of York, suggest that rising energy costs are placing an unsustainable burden on millions of people across the country.
According to the End Fuel Poverty Coalition, households are now losing an important opportunity to reduce existing energy debt or build financial reserves before winter arrives. With prices increasing during the summer months, many families may enter the colder season already struggling to manage their finances.
The latest price cap also brings higher unit rates for both electricity and gas. For households paying by direct debit, electricity prices will increase from 24.67 pence per kilowatt-hour to 26.11 pence, while gas prices will climb from 5.74 pence to 7.33 pence per kilowatt-hour. Although these changes may look relatively small on a unit basis, they translate into much higher annual costs for millions of consumers.
Energy market analysts also warned that prices are unlikely to ease in the near future. Forecasts suggest energy costs could stay elevated as autumn and winter approach, with higher gas consumption during colder weather expected to place more financial strain on households. As a result, many families may face difficult decisions about managing essential living costs while coping with higher energy bills throughout the remainder of the year.
