The weather's getting cold but the bills will be red-hot

Temperatures are forecast to dip below last winter's levels, finds Esther Shaw, and gas and electricity suppliers could push what we pay to 1,000

With the Met Office predicting that this winter will be a lot colder than last year, you may be tempted to turn the heating up a notch or two.

But before you do, take the temperature of the market: consumers are being warned by energy broker Catalyst Commercial Services that prices are set to rise by 10 per cent in early 2008 - which could push the average household energy bill above the 1,000-a year-mark.

Catalyst says increases in wholesale gas prices, the decline in North Sea fields and the increase in the price of oil will "force suppliers' hands".

According to the National Energy Action (NEA) charity, for every 1 per cent rise in energy prices, a further 40,000 households are forced into fuel poverty defined as the need to spend more than 10 per cent of household income on electricity and gas.

If the NEA figures are right, up to 400,000 more households could become "fuel poor" in the new year.

As yet, no supplier has announced price rises for domestic customers, but the fear is that as soon as one provider makes the move, the others are likely to follow suit.

Hard-pressed consumers could be forgiven for having djà vu over rumblings of sharp price increases

"Dire warnings that energy prices must rise have become a regular feature of the British winter," says Allan Asher, chief executive of consumer group Energywatch. "High oil prices, extra-cold weather and potential gas shortages are the usual reasons given. This talk becomes a self-fulfilling prophecy by giving comfort to those operators that will seize on any excuse to raise prices - and to raise them fast."

That said, he adds, the story is very different when it comes to cutting the burden for consumers.

"In the last year, wholesale gas prices have fallen by 50 per cent, and while the industry enjoyed the respite, it was in no hurry to share the benefits with consumers," Mr Asher explains. "Suppliers waited until spring this year to pass on miserly reductions to their customers of an average 15 per cent off gas bills and an average of 4.9 per cent off electricity bills. That little nest egg should tide companies through any cost spikes."

The NEA has asked energy regulator Ofgem to look more closely at how the big six energy firms British Gas, Powergen, EDF Energy, npower, Scottish Power and Scottish and Southern (SSE)- respond to wholesale price changes.

"While price increases are passed on rapidly, there is evidence that any price reductions take much longer to filter through to households," says NEA chief executive Jenny Saunders. "The Government-appointed Fuel Poverty Advisory Group has also questioned suppliers' willingness to increase profit margins rather than make any serious attempt to absorb part of the cost."

The predicted price hike couldn't come at a worse time for many people.

"It is going to squeeze households dry," warns Ann Robinson, consumer policy director at comparison website "This winter is expected to be colder than last, plus consumers will be facing the full impact of the credit crunch in the new year."

At the same time, new figures from the Office for National Statistics show 23,900 people died last winter as a result of the cold weather, of whom 22,300 were older people.

"Many pensioners feel they need to cut back on their heating to reduce their bill, yet this could be putting their health at risk," says Gordon Lishman, director-general of the Age Concern charity. "With fuel costs 60 per cent higher than four years ago, it is no wonder that many pensioners worry about paying expensive bills. But they shouldn't have to worry about health versus wealth."

The energy-efficiency grant 'has made a real difference'

Beryl Barrett, 40, from Croydon, has warmed to the Government's Warm Front financial grant given to people on low incomes to help with the cost of insulation and other energy-saving measures.

With a family of five children Wayne, aged 15, Hannah, 11, Rebekah, 8, Joseph, 5, and 10-month-old Faith - Beryl has to manage the household finances very carefully.

"I got involved with Warm Front last year when I was on income support," she says. "I got a grant for 2,700 which I put towards a variety of measures, such as replacing my old boiler, installing insulation and fitting energy-efficient bulbs."

As a result, Beryl reckons she has cut her monthly energy bills from over 60 to about 40. "I always regulate how long the heating is on for, and monitor how much we're spending, but the grant has made a real difference."

Nevertheless, she is still aware of the need to economise on energy use. "I do little things like turning off lights and not keeping the hot water tap running for longer than needed."

The stoking up of prices

The effect of a 10 per cent increase on combined annual gas and electricity bills:

Supplier/Prices today/With 10% rise

British Gas 912/1,003

Powergen 913/1,004

EDF Energy 907/998

npower 908/999

Scottish Power 958/1,054

Scottish & Southern 875/963

Average 912/1,003

Source: uSwitch (based on household using 20,500kwh of gas and 3,300kwh of electricity a year)

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Arts and Entertainment
The Bach Choir has been crowned the inaugural winner of Sky Arts’ show The Great Culture Quiz
arts + ents140-year-old choir declared winner of Sky Arts' 'The Great Culture Quiz'
Life and Style
food + drink
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

    $200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

    Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

    $125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

    Sheridan Maine: Commercial Finance Manager

    Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

    Sheridan Maine: Regulatory Reporting Accountant

    Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

    Day In a Page

    Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

    Homeless Veterans appeal

    In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
    Could cannabis oil reverse the effects of cancer?

    Could cannabis oil reverse effects of cancer?

    As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
    The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

    The Interview movie review

    You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
    Serial mania has propelled podcasts into the cultural mainstream

    How podcasts became mainstream

    People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
    Jesus Christ has become an unlikely pin-up for hipster marketing companies

    Jesus Christ has become an unlikely pin-up

    Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
    Rosetta space mission voted most important scientific breakthrough of 2014

    A memorable year for science – if not for mice

    The most important scientific breakthroughs of 2014
    Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

    Christmas cocktails to make you merry

    Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
    5 best activity trackers

    Fitness technology: 5 best activity trackers

    Up the ante in your regimen and change the habits of a lifetime with this wearable tech
    Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

    Paul Scholes column

    It's a little-known fact, but I have played one of the seven dwarves
    Fifa's travelling circus once again steals limelight from real stars

    Fifa's travelling circus once again steals limelight from real stars

    Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
    Frank Warren column: 2014 – boxing is back and winning new fans

    Frank Warren: Boxing is back and winning new fans

    2014 proves it's now one of sport's biggest hitters again
    Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

    Jeb Bush vs Hillary Clinton

    Karen Tumulty explores the power dynamics of the two first families
    Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

    Stockholm is rivalling Silicon Valley

    The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
    Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

    Crucified Santa: Urban myth refuses to die

    The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
    Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

    The Boy in the Dress: On set with the stars

    Walliams' story about a boy who goes to school in a dress will be shown this Christmas