Energy payments set to fall throughout the UK – however specialists concern future warning | EUROtoday

The huge drop in family vitality prices anticipated in April could possibly be short-lived, specialists have warned, as the federal government is urged to make sure that adjustments will final.

Energy regulator Ofgem is predicted to announce on Wednesday that its vitality worth cap for April to June will drop by £120 from its present degree. The substantial drop is pushed by the federal government’s transfer to chop vitality payments by scrapping an vitality effectivity programme.

This will “deliver a clear boost to living standards”, assume tank the Resolution Foundation discovered, including this could “help to keep bills below current levels until at least 2029”.

A brand new report from the influential unit additionally credited the progressive impact of the measure, discovering the design of the coverage will profit lower-income households essentially the most. Due to this, round 1 / 4 of households (24 per cent) will save greater than £200 this yr.

open picture in gallery

The adjustments may also make the everyday vitality invoice £200 decrease than in 2024 in actual phrases, researchers discovered, which is a welcome drop after the pressures of the Covid pandemic and value of residing disaster.

However, they added this could possibly be eroded in simply three years. They estimated coverage prices and funding in community infrastructure imply payments will probably be simply £60 decrease on common than right this moment in March 2029, and the top of the federal government’s low cost scheme a month later will add one other £55.

This means a “cliff edge” looms, the Resolution Foundation stated, as the federal government might want to determine whether or not to permit payments to rise or discover funding to increase the assist. It added ministers shouldn’t “wait until the eleventh hour to decide” and will as an alternative set out a sturdy framework earlier than 2029.

Jonathan Marshal, principal economist on the Resolution Foundation, stated: “Next week’s energy price cap announcement will show a significant drop in household bills, largely because of the government’s £6.9 billion energy bill discount.

open image in gallery

“The policy is well designed. By reducing electricity unit rates, it supports the shift towards electrification at the same time as delivering savings worth twice as much to the poorest families as to the richest, as a share of spending.

Get a free fractional share worth up to £100.
Capital at risk.

Terms and conditions apply.

Go to website

ADVERTISEMENT

Get a free fractional share worth up to £100.
Capital at risk.

Terms and conditions apply.

Go to website

ADVERTISEMENT

“However, this support is due to end in April 2029. The government should set out a clear and durable framework for deciding which energy policy costs are funded by bills and which through taxation soon, to avoid scrambling for a solution in an election year.”

A Department of Energy Security and Net Zero spokesperson stated: “This government is delivering on our promise to take an average of £150 of costs off bills from 1 April. Ofgem will set out the final price cap figure in the usual way next week.

“Tackling the energy affordability crisis is our number one priority – and this is just the start.

“We are getting off the rollercoaster of volatile fossil fuels and onto clean homegrown power which we control, to bring down bills for good.”