Energy consumers face a flat rate with fixed tariffs of £ 4,000

Tough households face tied to fixed energy prices, which cost up to £ 4,000 a year amid “unsustainable” proposed price cap increases this spring.

Prime Minister Boris Johnson is ready to announce new measures to help consumers cope with rising energy bills in the next few weeks, and is reportedly taking part in the crisis talks this week.

Mr Johnson said Monday that ministers understood the difficulties people were facing and said the government was “definitely considering what we could do.”

The annual fixed energy tariff for a typical household now costs almost £ 2,500, according to recent data from the comparison site Uswitch.com.

Costly: Combat energy customers face tied to fixed tariffs that cost up to £ 4,000 a year

Costly: Combat energy customers face tied to fixed tariffs that cost up to £ 4,000 a year

This average annual fixed price of GBP 2,500 is GBP 500 per year above GBP 2,000, to which energy regulator Ofgem is expected to raise the variable tariff ceiling in April.

Ovo Energy, the second largest energy supplier in the United Kingdom, previously offered a fixed rate trade of less than £ 4,200 during the holiday season. Since then, it has reduced its prices for consumers. The most expensive fixed trade today is from Outfox the Market for more than £ 3,500 a year, said one expert This is Money.

Martin Young, an energy analyst at Investec, told The Telegraph that the numbers are “staggering,” but he believes energy prices will rise or rise later this year.

He said: “From the end of November to the last week, fixed price stores jumped.

“If you now find yourself in a situation where even well-secured suppliers face these problems, then it is clear that the price cap itself has structural problems.”

In recent months, the energy price cap has lagged behind rising gas prices, generally protecting consumers from huge price increases, but forcing suppliers to sell energy at a loss.

It is expected to rise from GBP 1,277 to GBP 2,000 in the spring, but if fixed trades remain more expensive and households choose to stay at the variable tariffs covered by the ceiling, suppliers could be under increasing financial pressure.

Mr Young told The Telegraph: “If you now find yourself in a situation where even well-secured suppliers face these problems, then it is clear that the price cap itself has structural problems.”

Lost jobs?  Today, Unite union issued a warning against possible mass redundancies in the energy sector

Lost jobs? Today, Unite union issued a warning against possible mass redundancies in the energy sector

He said that because the ceiling is updated every six months, it is “a six-month firm agreement for all intentions and purposes”.

As a result, Mr Young believes that suppliers could stay in the lurch if they buy energy in advance for customers with variable tariffs so that they can leave when cheaper fixed offers are available.

In an effort to increase financial performance in the sector, Ofgem is preparing to conduct stress testing of energy suppliers after the recent wave of bankruptcies.

But, Richard Neudegg, head of regulation at Uswitch, thinks it’s too little, too late and that more needs to be done to help consumers and address the price cap.

Mr Neudegg said: “The introduction of financial stress testing after 26 energy providers have left the market feels like the very definition of closing a stable door after a horse slammed.

“Financial testing was to be used to identify suppliers who were ill-equipped to deal with the shocks that shook the market. While these proposals are necessary for the future, they are clearly too late to help the current crisis.

“Ofgem’s priority now must be to build a resilient market that can withstand any future shocks.”

He added: “The way the price cap works has also been a major factor in the current energy crisis.

“It is currently delaying the transmission of the full shock to the system for consumers, but the regulator cannot prevent it from coming in April.”

The Think-tank Resolution Foundation has warned of a “cost-of-living catastrophe” where household spending is likely to rise by £ 1,200 a year, with about half added to energy bills and the rest due to other costs, including inflation and tax pressures.

Last month, Trade Secretary Kwasi Kwarteng met individually with energy chiefs from Britain’s largest energy suppliers about twice a week before Christmas.

Some Conservative MPs want to reduce green levies and VAT to help reduce bills. Higher taxes for oil and gas producers are also demanding work that also wants to suspend VAT.

Is there a threat of mass redundancies in this sector?

Today, Unite union also issued a warning against possible mass redundancies in the energy sector.

The unions estimate that over the next six months, some leading energy companies are considering drastic job cuts combined with further wage cuts and attacks on conditions such as pension payments.

Sharon Graham, United’s secretary general, said: “Our intelligence suggests that if the government does not intervene in the energy crisis, tens of thousands of jobs could be lost by the summer.

“We know of one energy provider who will announce a 20 percent reduction in staff. And there are many others behind them. “

She added: “How long will the government be a spectator in this coming labor crisis? We need the government to intervene with a support program to save jobs for industry, and we need it now. We refuse to allow workers to carry the can for a crisis that they did not cause themselves. ”

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