How much will the average energy bill in Birmingham cost with the new price cap?

Ofgem, the UK’s energy regulator, announced last week that it will increase the energy price cap from October 1. It means the maximum price a supplier can charge for electricity will rise on average from 28p per kilowatt-hour (kWh) to 52p per kWh, while gas will increase from 7p to 15p per kWh.

Including standing charges, it means the average household’s energy costs on a variable tariff in the UK will increase by 80% – from £1,971 to £3,549 per year. Energy charity National Energy Action said millions now face a “big freeze” and urged the Government to act immediately to provide greater support ahead of the winter.

Energy usage varies throughout the UK – we’ve studied local figures to work out how much an average household might pay in your area. Department for Business, Energy and Industrial Strategy figures show the average household in Birmingham used a median amount of around 2,898.3 kWh of electricity and 13,406.98 kWh of gas in 2020.

A kWh is the amount of energy required to provide one kilowatt of power for one hour and the median – the middle number in a series – is used to ensure the figures are not skewed by extreme highs or lows.

One kWh would run an average oven for around 30 minutes. At current prices, it means the average household on a variable tariff in the area would be paying around £2,010 per year to heat and fuel their home. But when the price cap increases in October, this will soar to approximately £3,790. Households on a fixed tariff will pay for energy at their current rate until the term comes to an end.

The average household in Birmingham could spend more than £3,500 per year on their energy bill when the new price cap comes into effect in October, analysis suggests.

What have campaigners said about these costs in Birmingham?

Adam Scorer, chief executive of the NEA, said the scale of harm caused by soaring prices needs to sink in and that warm homes will be a “pipe dream” for many this winter as they wrestle with higher tariffs.

“Without bold action to support the most vulnerable and those on the lowest incomes, this will effectively prise their fingers from the cliff edge and push them over the precipice,” Mr Scorer added.

“The Government needs to immediately upgrade the household support package it first announced back in May. Households need money in their pockets to weather this storm or we are going to see millions in dangerously cold homes, suffering in misery with unimaginable debt and ill health.”

Energy consultancy firm Cornwall Insights expects the price cap to rise dramatically again in January and April, with yearly energy costs reaching £5,400 and then £6,600 for the average UK household. It would mean annual domestic fuel costs will have more than tripled in one year.

Torsten Bell, chief executive of the Resolution Foundation, a think tank focused on improving living standards, said Britain is on course for a “winter catastrophe” that poses a serious threat to families’ physical and financial health.

Mr Bell added: “Big bill reductions combined with solidarity taxes, or throwing the kitchen sink at a brand-new social tariff scheme, should be the focus for whoever becomes the next Prime Minister.”

What has the government said about the rise in energy prices?

A Government spokesperson said direct financial aid, targeted at the most vulnerable, will “continue to reach people’s pockets in the weeks and months ahead”, and that preparations have been made so that this support can be implemented as quickly as possible when the new Prime Minister is in place.

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