According to data, Britain's electricity prices are now at an all-time high, while the cost of gas has increased to its highest level in three years. As energy market prices rise, the cost of household energy also tends to go up.
With many people on limited incomes already struggling, including pensioners and families with young children, many households could face additional pressure.
The lockdown means that people are spending more time at home, particularly now that schools and colleges have been closed. As a result, people are using their heating more because they are spending an increased amount of time in their properties. As the colder weather makes its way to Britain, many will be tempted to turn the temperature dial up a notch, and this could lead to hefty bills.
Raising tariffs to recoup losses
Since the Covid-19 outbreak, many people have been unable to make payments on their bills. As such, energy companies, along with others, have experienced losses. However, energy price hikes passed onto customers, coupled with an increased demand for heating during the big freeze, could see energy firms recoup some of these losses. There is even speculation that the energy regulator may increase the caps on variable energy tariffs to further aid energy providers.
While this comes as good news for energy firms, it will have a substantial negative impact on many customers. With the cold spell set to last some time, according to weather experts, the effect on household finances could be even more significant. A combination of the lengthy cold snap coupled with more time at home and higher energy costs means that many people could be plunged into fuel poverty.
While the sky-high rates are currently affecting energy markets due to an expected increase in demand due to cold weather, firms could quickly pass these on to customers. With many having lost their jobs or been furloughed because of Covid-19, the potential sharp increases couldn’t come at a worse time.