Lowered Ofgem price cap will still leave a quarter in fuel poverty, says group

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More than a quarter of households in Great Britain will remain in fuel poverty even though the regulator Ofgem has lowered the price cap for domestic energy, campaigners have warned.

The cap, which limits what suppliers can charge per unit of gas and electricity, falls from Saturday 1 July to the equivalent of ?2,074 a year for the usage of a typical household.

The level is lower than that set under the previous government scheme – the energy price guarantee (EPG) – which kept the average dual-fuel energy bill at ?2,500 a year over the winter. However, it remains almost ?1,000 higher than it was two years ago.

Fuel poverty campaigners at National Energy Action (NEA) have said 6.6 million households remain in fuel poverty – and may miss out on government help after the closure of the EPG at the end of June. Saturday also marks the end of a separate support scheme that paid a total of about ?400 per household from October last year.

The EPG will be replaced with a targeted scheme to help vulnerable households pay their energy bills. The scheme includes a ?900 payment for those on means-tested benefits, ?300 for pensioners and an extra ?150 for disabled people.

An estimated 1.7m households are expected to miss out on the support available because they are not registered for benefits, according to a study by researchers at the University of York.

The research, commissioned by the Child Poverty Action group, found those likely to miss out on government help included 688,000 fuel-poor households with children.

Adam Scorer, the chief executive of NEA, said: “Millions of vulnerable people miss out on cost of living payments as they aren’t on the right benefits or no benefits at all. These people need additional help but are being left to manage bills that are still on average over ?1,000 a year more expensive compared to the start of the crisis.”

He added: “The Treasury cannot continue to subsidise everyone’s bills, but there is an urgent case for using at least ?3bn of underspent resources from recent programmes to help these very vulnerable groups. Without more support, too many will continue to rack up unmanageable debts or try and survive in unheated homes, causing ill health, misery and avoidable death.”

On Friday, the chief executive of Centrica, which owns British Gas, said British energy bills were expected to remain high for the foreseeable future because global gas market prices were still twice as high as normal.

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Chris O’Shea told the BBC: “I think what we’ve got to remember is the energy prices had more than doubled before Russia invaded Ukraine. Now, prices are back down to pre-invasion levels but they’re still two-and-a-half times the long run average.”

A spokesperson for Ofgem said: “This remains one of the most difficult and volatile periods in history for energy consumers. And while bills remain higher than before the energy crisis, it is great news that people will see them drop by ?460 a year on average from 1 July with more fixed deals coming back on to the market too.

“Anyone struggling to pay their bills should reach out to their supplier as soon as possible.”