The government’s pledge to grant £400 to soaring costs this year may only “scratch the surface” experts have warned, as energy bills are predicted to increase to more than £3,600 this winter.
Research firm Cornwall Insights predicts that the energy cap could reach £3,616 in January 2023, an increase on its previous estimate of £3,363.
Citizens Advice Scotland has said the latest prediction is a “hammer blow to people already seeing their budgets stretched to breaking point”.
Dr Craig Lowrey, who carried out the analysis for Cornwall Insights, said: “While our predictions for the price cap have continued to rise amid wholesale market volatility, due to uncertainty over Russian gas supplies ahead of winter, these latest forecasts indicate the potential longevity of high household energy costs.
“There are several ongoing industry consultations being undertaken by energy regulator Ofgem that will affect the level of the cap, and as part of our forecasts we have taken a view on how these will play out. The main one of these is the proposed move from the current use of seasonal cap periods to quarterly caps with effect from this October.”
The analysis added there were little signs of household bills abating in 2024.
Dr Lowrey added that even the government grant of £400 to relieve some pressure of energy bills in October will “not make much of a dent in what is likely to be a sustained period of high energy bills”.
He said: “While the government has pledged some support for October’s energy rise, our cap forecast has increased by over £500 since the funding was proposed, and the truth is the £400 pledged will only scratch the surface of this problem.”
Responding to the latest analysis, Stephanie Millar, Citizens Advice Scotland social justice spokesperson said: “This would be a hammer blow to people already seeing their budgets stretched to breaking point, and underlines that the cost of living crisis isn’t going anywhere.
“There is a real risk of a lasting legacy of poverty, debt and destitution following this crisis. People are going to be feeling the effects of it for years to come, having been swept up in a tsunami of rising prices and falling incomes.
“The most important thing people can do is seek advice. The Citizens Advice network offers free, impartial and confidential advice and we get real results for people – on average those who see a financial gain through our advice are over £4,400 better off. We’re for everyone regardless of background and circumstance and we don’t judge, we just help.”