Price cap increase 'life or death' for Tillicoultry family
OfGem's energy price cap increase today means thousands of families across the country now face the difficult decision of 'heating or eating' this winter but for one Tillicoultry family the choice could mean life or death.
Last updated 26th Aug 2022
OfGem's energy price cap increase today means thousands of families across the country now face the difficult decision of 'heating or eating' this winter but for one Tillicoultry family the choice could mean life or death.
Carolynne Hunter's 12 year-old daughter Freya requires round the clock care from a team of specialist nurses who look after her in her home. She also has vital medical equipment which has to run all day and night to keep Freya safe and well.
Soaring bills and heart breaking choices
Carolynne's energy bills soared to more than ÂŁ800 per month after the first price cap increase and has been told to expect them to be as high at ÂŁ1000 per month come January.
She recieves no help towards the cost of keeping Freya's medical equipment running and and is now having to consider sending her daughter to live in hospital during the coldest months.
A decision which she says would be devastating: "That in itself is dangerous for Freya.
"Living in a hospital is not a nice prospect for anybody. And for Freya, it is just everything that would be so damaging to her life and I don't want that to happen.
"Freya needs be at home where she is loved and she's cared for, and where she's in her own home environment, and she's comfortable and safe. And so it's a really, really distressing situation.
"I simply can't change what I use. And yeah, through the summer, I'm not using as much but come the winter I can't cut back. I can't not keep Freya warm.
"If her temperature was to drop, she could go quickly into hypothermia.
"And she could die. That's the reality of our life."
Price increase could leave 13 million people struggling to pay bills
The price cap has already been raised this year, in April it went up by 54% to a record ÂŁ1,971 per year for the average household.
There is concern from Citizen's Advice that around 13 million people in the UK will be struggling to pay their energy bills this winter now the cap has been raised.
Principal Policy Manager at Citizen's Advice Rachel Beddow told us: "Already, daily, we're seeing people having to make the choice between giving the kids a hot bath or giving the kids food."
READ MORE: 1 in 4 will be in fuel poverty
How the cost of living has rocketed
Interest rates and inflation go up
Inflation rose by 8.8% in the 12 months to January 2023, down from 9.2% in December 2022. With interest rates also rising to 4%, those saving money will earn more interest on their finances, whilst those paying mortgages would pay more interest to the bank.
Energy bills
The price of energy went up incredibly as the cost of living crisis hit, with the gas price spike caused largely by the war in Ukraine. The price cap - which is set by an independent regulator to help offset costs onto customers - was set to rise to ÂŁ3,549 for an average home in October but a price freeze from the government restricted the typical bill to ÂŁ2,500. That's still an increase of 27% from the previous energy cap and as it's a cap on unit cost, the more energy you use the higher your bill will be.
Food prices
The cost of a weekly shop also has gone up as a result of the cost of living crisis. As a result of the war in Ukraine, a number of products including cooking oils and wheat have been disrupted. This means that several products are now considerably more expensive, driving bills up for customers.
Prices at the pumps
The average cost of petrol has also rose to unprecedented levels. Supply lines for petrol have been thrown into doubt as a result of the war in Ukraine, as Russia is a large export partner for gas, oil and fuel. In April 2022, the average price for a litre of petrol on the forecourt was 160.2p, whilst a litre of diesel would cost 170.5p. By late June 2022 the price had risen to an average of 190.9p for a litre of unleaded and 198.9p for a litre of diesel. In March 2023 the price wass on average of 147.03 in petrol and 167.04 in diesel.
Average cost of filling up a car with petrol hits ÂŁ100
On 9th June 2022, the average cost of filling up a car with petrol hit ÂŁ100 for the first time ever. Diesel had already hit that milestone. It comes as the cost of fuel hit a record high of one pound eighty a litre. The 2p rise was the biggest daily jump in 17 years. Prices have dropped by at least 20p per litre since the high point.
What is the energy price cap?
The energy price cap limits what energy companies can charge for each unit of electricity and gas and what they can charge as a daily standing rate.
While that means there is a maximum cost to your energy, there isn't an overall cap on your bill, the more you use, the more you'll have to pay.
The cap was introduced by regulator Ofgem in January 2019 to stop customers from being charged too much.
The cap is largely based on wholesale prices and as those prices have risen significantly, so has the price cap.
When does the new energy price cap take effect?
The announcement today will take effect on 1st October, but earlier this month Ofgem announced that rather than reviewing the price cap every six months, it will now be reviewed every three months.
That means that the cap announced today will run from 1st October to 31st December, with another price review for the next quarter, with many predicting we will see another price rise.