UK energy bills due to increase

Low-paid workers in the UK are set to get a pay rise as of this week, as minimum wage increases by 4.9%. However, at the same time, consumers are being hit with increases in their bills that could end up costing an extra £240 a year, according to

As of 1st April, workers aged 25 and over will get a pay rise of 4.9%, up to £8.21 an hour from £7.83 per hour. This will benefit an estimated two million households, including 200,000 workers in the retail and hospitality sectors, who are currently the lowest paid group.

However, the average council tax bill is due to increase by £75.60 a year, and prescription charges, dentist fees, and TV licence fees are all going up as of 1st April by 2.27%, 5%, and 6.18% retrospectively. Others include water bills, road tax for certain vehicles, and some broadband and phone packages.

Also among the price hikes is the cost of energy, with the average household energy bill predicted to rise by £117 a year. That’s an increase of around 10%, which is due to Ofgem’s higher price cap becoming effective.

The energy price cap was introduced by Ofgem last year in a bid to save the most vulnerable households money. But it’s been controversial. It’s been challenged by suppliers including British Gas and Npower, who claim they need to increase prices due to rises in wholesale energy costs.

This affects around 11 million households in the UK, and will cost British consumers a total of £1.4 billion, affecting standard variable tariffs – a tariff that’s commonly used by low-earners and the most vulnerable in society – for both gas and electricity.

Ofgem has agreed to increase the cap, pointing to the high wholesale prices, as suppliers have argued. Although consumer groups have criticised this argument, as many smaller energy suppliers, including Bulb, the 8th largest in the UK, have recently announced price cuts.

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