Household energy ‘unaffordable' in less than three years
Britain is less than three years away from an affordability crisis when it comes to household energy, according to research from uSwitch.com. Household energy bills have more than doubled in the last eight years - if this trend continues the average bill is set to break the £1,500 a year barrier by 2015 and will continue upwards to hit £2,766 a year by 2018.
£1,500 is the tipping point at which energy bills will become unaffordable in the UK. Once bills break through this ceiling over three quarters of households (77%) will be forced to ration their energy use, 59% will go without adequate heating and 36% will be forced to turn their heating off entirely.
If bills then smash into the realms of £2,000 a year - which the forecast suggests could happen in 2016 - the numbers potentially compromising their health and well-being will grow even higher. At this point almost nine in ten households (88%) will be rationing their energy use, 75% will be going without adequate heating and over half (55%) will turn their heating off entirely.
Worryingly, the forecast does not take into account the impact of the Government's ambitious plans to cut carbon and switch to renewable generation. Suppliers are already indicating that non-commodity costs or costs outside of their control could push bills up further. Two of the Big Six have even hinted at price rises this winter.
The average household energy bill is already an eye-watering £1,252 a year - just £248 below the ‘affordability ceiling' of £1,500. However, a third of consumers (32%) say that household energy is already unaffordable in the UK.
Ann Robinson, Director of Consumer Policy at uSwitch.com, says: "The UK is hurtling towards a cliff beyond which the price of household energy will become unaffordable. Once the average bill hits £1,500 a year consumers will be forced to compromise on their comfort, health and well-being. Time is running out - if pricing trends continue we will hit ‘crunch point' in less than three years and that is without factoring in the cost of current energy policy.
"The Government has to understand that affordability is a huge concern to consumers and has to be given equal footing with security of supply and decarbonisation. Bills are already just £248 or 17% short of the £1,500 ‘tipping point' at which consumers will be turning down and switching off. While we all have a responsibility to use energy carefully and sparingly, we also have a right to enjoy a safe and warm home. This will be compromised if bills rise much further.
"At the very least, consumers have the right to know what the impact of energy policy could be on their bills. This will give them time to adapt accordingly by ensuring that they are paying the lowest possible price for their energy and are using energy efficiency measures to protect themselves against higher prices."