Energy bills increased twice rate of inflation since 2004

A study from the Committee on Climate Change brings further attention on one major issue which is causing many families to struggle, and that is the ever increasing prices of electric and gas bills. In fact, in total, households across the UK are facing total expenses that average £1,150 per year, which is a major increase from 2004. In that year, the average bill was only £650. So not only have families had to deal with a weak economy, but prices of everything, including their energy bills, have been increasing at a very high rate.

While the price of everything goes up over time, this increase is rather large when compared to other expenses. Considering that the general inflation rate was under 25% during this time frame, this increase is over twice that. In addition, wage increases of most workers have been under the rate of inflation as well, so this makes the increases in fuel bills even more of a concern, especially to households on a low income.

Some people may blame the increase on the low carbon initiative being implemented, but Climate Change Committee does not find this to be the case. They can only attribute about 20% of the total increase to climate change policies, so only about £150 was from that. The rest of the increase is due to higher prices from gas and electric suppliers.

This can be caused by higher prices of natural resources, such as oil, as well as the expenses incurred by those suppliers and their companies. Those costs are then passed on to their customers, so even if a fuel supplier is not efficient or if they overpay their manager’s wages, then the consumer still foots the bills for this.

To make the 75% increase even worse, the study also shows that most people even reduced their energy consumption over the last 10 year. So people did what they should have by conserving, but they did not benefit at all. If they did not do this, the average bill would have been even higher at £1,305.

Future energy bill increases post climate change initiatives

While the Committee on Climate Change does not attribute the past increase to low carbon policies, they do say energy bills will need to increase even more in the future as a result of the government policy. In the future, electricity generation will need to change to more expensive sources of fuel, such as low-carbon alternatives such as nuclear, wind power or renewable, which are currently more expensive than traditional fossil fuels. As a result, families across the nation will have higher costs.

The news is not all bad though. With increased conservation, it may be that households may not have too large of an increase in their bills, and it is just too soon to tell for sure. So the Committee estimates that over the next 15 years, a household bill may increase as much as £75, but this is hard to predict. Even so, that future increase, if it is to even occur, would be less than what has happened over the last 10 years.