Energy bills in Luton could rise by more than £1.5k a year as cost of living crisis continues

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

And Luton’s council leader has warned that the signs are things will get worse in the current cost of living crisis.

Ofgem, the UK's energy regulator, announced last week that it will increase the energy price cap from October 1.

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.

Department for Business, Energy and Industrial Strategy figures show the average household in Luton used a median amount of around 2,851 kWh of electricity and 13,568.56 kWh of gas in 2020. 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.

Luton Council leader, Hazel Simmons MBE, said: “From utility bills, to shopping baskets and the steep prices we are paying at the pump, each one of us is feeling the pinch at the moment.

“While there is no quick and painless solution to the financial hardships many of us are facing, there are various support options available. Please look at some of the possibilities to see if you are eligible for help in order to make life less of the struggle that it currently is.

“Unfortunately all the signs are that things will get harder for people over winter. As a council we continue to lobby central government making them aware of the plight of the most vulnerable in our town and urging them to provide more money so we can help those most at risk.

“At this difficult time, our message is simple: we are doing all we can to help you.”

Adam Scorer, chief executive of the NEA, said 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.

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.