Energy bills set to rise as millions struggle with cost of living: ‘People are already rationing’

Energy bills are expected to rise from July in a blow to households who are “already rationing heating, skipping meals and going without basic essentials”.

Regulator Ofgem is set to announce its new energy price cap on Wednesday (27 May). This will set the amount that a typical household can expect to pay in their energy bills from July to September.

Forecasts from consultancy Cornwall Insight suggest that the cap will be around £1,850.13.

This would be a rise of £209 a year, or around £17 every month, for an average family. It comes amid fears of increasing pressures on household budgets as global conflicts push up the cost of fuel and food.

Around two million people across the country are already in debt to their energy supplier, according to recent statistics from Energy UK.

Money Wellness, one of the largest free financial advice services in the country, has found that the amount owed to energy providers has increased by 23% over the past three years.

Average energy debt has risen from £1,848 in 2023-2024 to £2,270 in 2025 to 2026.

Rebecca Lamb, head of external relations at Money Wellness said: “Energy prices may have come down from their peak, but energy debt has not followed the same path. Many households are still repaying significant arrears built up over recent years, and those repayments continue to put pressure on already stretched budgets.

“Even a modest increase in the price cap risks pushing some households into further difficulty, particularly where there is already outstanding debt on the account.”

The Fuel Bank Foundation is forecasting annual energy costs of around £1,900 by winter. For the people we support, that could mean roughly another £300 in costs over six months alone.

“Many of these households are already rationing heating, skipping meals and going without basic essentials,” said Matthew Cole, chief executive of the Fuel Bank Foundation.

“That is why we need to prepare for winter now. We need practical, targeted support for the households most at risk, to stop people having to choose between heating and eating, or worse, living without energy altogether.”

The government has expanded the warm home discount which means that millions of families will receive a £150 boost to help them cover their energy bills.

“We know the government is actively considering interventions ahead of this winter, but we urge ministers to act now and use existing mechanisms that can be delivered quickly and automatically,” Cole said.

Read more:

• Benefits, water bill hikes and TV licences: All the tax year changes in April 2026 you need to know
• What will the Middle East conflict mean for UK energy bills?
• What happens if you ignore your bills or can’t afford to pay? Here’s how to get help

What should be done to help people afford their energy bills

The Fuel Bank Foundation is urging the government to introduce a targeted scheme delivering support automatically.

Money Wellness is additionally calling for a national social tariff to be automatically applied to ensure that vulnerable people can afford their energy bills, in a similar way to to the WaterSure scheme.

It has found that up to 87% of people in energy bill debt could meet eligibility criteria for a social tariff, including those in receipt of benefits, those who have experienced long-term debt, or those who have use high levels of energy for essential purposes like for medical equipment.

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