Consumers are still facing high energy costs this winter despite a cut in the price cap. And for some consumers the affordability challenges are likely to be severe, according to a new report by statutory body Consumer Scotland.
The Energy Tracker briefing, the third in a series of reports from Consumer Scotland, is published on the day Ofgem announced a reduction in the Energy Price Cap from October.
The reduction will see bills fall to £1,923 per annum for the average household in Great Britain. However, this is still significantly higher than October 2021 when average bills stood at £1,277.
The new Consumer Scotland Tracker report found one-third of consumers (33%) continued to report they are not managing well financially, just over six in ten (62%) reporting rationing of energy in spring 2023.
Individuals with incomes lower than £20,000 (52%) and those with disabilities (46%) find it more difficult than average to keep up with their energy bills.
There is also a growing need to address domestic energy debt and arrears across Great Britain, which Ofgem figures show increased from £1.55bn in Q1 2021 to £2.25bn in Q1 2023 – an increase of £700m in two years.
Chief Executive of Consumer Scotland Sam Ghibaldan said:
“While the lower price cap is welcome the energy bill for a typical household will still be nearly £650 more than it was in early 2022.
“Continuing high prices mean energy bills are still unaffordable for certain groups of consumers. Our Tracker report makes clear that without further intervention these consumers are likely to continue to experience severe energy affordability challenges this winter.
“With energy price volatility forecast for the rest of the decade, these figures underline the fact the best way to reduce bills is by reducing demand through improved energy efficiency.
“It is also key that the future tariff structure and financial support results in all consumers being able to afford their energy bills.”
Consumer Scotland will be undertaking further work on each of these issues.
Background
Consumer Spotlight: Energy Affordability Tracker 3
All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 1579 adults. Fieldwork was undertaken between 2nd - 20th March 2023. The survey was carried out online. The figures have been weighted and are representative of all Scottish adults (aged 16+).
Established under the Consumer Scotland Act 2020, Consumer Scotland is a Non-Ministerial Office, independent from government and accountable to the Scottish Parliament.
Consumer Scotland has highlighted ongoing issues of affordability in the energy market in a series of tracker surveys.
Consumer Spotlight: Energy Affordability Tracker 1