Household energy 'unaffordable' in less than three years

Wednesday 30th May 2012

Household energy will be unaffordable in less than three years’ time, according to new research from uSwitch.com. If pricing trends continue, the average household energy bill will break the £1,500 a year barrier by 2015. At this point almost six in ten households (59%) will be going without adequate heating and almost four in ten (36%) will be switching their heating off entirely:

·         Energy bills have more than doubled in the last 8 years – if this trend continues bills could reach £1,582 a year by 2015 and £2,766 by 2018

·         Almost six in ten people (59%) say that energy will become unaffordable in the UK if the average bill hits £1,500 a year- the average household energy bill today is £1,252 a year, just £248 short

·         £1,500 a year is the tipping point at which three quarters of households (77%) would be forced to ration energy – 59% will go without adequate heating, while a third (36%) would be forced to turn their heating off entirely

·         Almost a third of consumers (32%) say that household energy is already unaffordable in the UK.

Britain is less than three years away from an affordability crisis when it comes to household energy, according to new research from uSwitch.com, the independent price comparison and switching service. 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. 

The household energy ‘affordability ceiling’(average household energy bill today is £1,252 a year):

Source: uSwitch.com