British families may see their energy bills almost double when the government ends its price freeze in April.
Chancellor Jeremy Hunt announced on Monday that Prime Minister Liz Truss’s flagship policy would be scrapped at the end of winter. It was supposed to run for two years, keeping bills stable for households amid the worst cost-of-living crisis for decades.
Scrapping the price freeze — set at £2,500 per year for the average household — may add £200 per month in gas and electricity costs for a typical working family with two children. That would propel monthly bills to a level four times higher than the same period this year, according to spending patterns aggregated by Nous, an app that helps individuals track and predict cost-of-living changes
While the Treasury is investigating a replacement program that better targets low-income households, families are already preparing to go without heating for longer this winter. Even with the price freeze, energy costs exceed a fifth of the disposable spending of the poorest 10% of households, according to Greg Marsh, founder and chief executive officer of Nous.
Separate analysis from Cornwall Insight estimates that the average household bill would surge to more than £4,000 a year from April.
Read: UK Scraps Energy Bill Price Freeze After This Winter
While individual bills will vary, depending on consumption patterns, family size and insulation, the government’s decision to scrap the freeze in a bid to restore its credibility and soothe markets has “transferred the cost of that volatility from the public purse to private households,” said Marsh.
“Unless there is significant support announced after the Treasury review, this may prove a large shock for middle- and higher-income households in the latter half of 2023 — many of whom are also facing sharp increases in the cost of their mortgages,” he said.
Fuel Poverty Action, a campaign group, plans to petition Downing Street on Wednesday to replace the price freeze with a free energy allowance for all households. The petition, signed by over 600,000 people, calls for windfall taxes on oil and gas producers, previously dismissed by the government, to pay for the measure.
“It is now all the more essential and more possible to win a totally new pricing framework,” Ruth London of Fuel Poverty Action said in an emailed statement. “The outlook is frankly terrifying.”