More than one in eight UK households are concerned about having no additional way to make cuts in order to afford a significant surge in annual energy bills this autumn, leading British financial services provider Legal & General has revealed in a survey.
According to their latest “rebuilding Britain” index of 20,000 people, over a quarter of households earning less than £20,000 fear they will be unable to tackle higher bills. The index showed that families in Yorkshire, as well as the south-west and Northern Ireland, are the least confident about covering their costs
In addition, almost half of UK households are uneasy about not being able to keep up with rent or mortgage payments over the next 12 months, as most realize that they will have to make cuts elsewhere.
Legal & General’s Chief Executive Nigel Wilson told the Guardian that “many households across the UK are currently facing very tough financial choices. For some, those choices seem impossible.”
He argued that the most concerning thing is that “the impact of the cost of living crisis is being felt more severely in some parts of the UK than in others,” something that Wilson said “threatens to widen the existing demographic and geographic inequalities that the levelling up agenda was designed to address.”
UK-based consulting company BFY Group estimated last week that British households could be landed with annual energy bills of over £3,850 ($4,636) in 2023, a threefold increase since the beginning of this year.
The report added that the UK Office of Gas and Electricity Markets (Ofgem) is expected to set a gas price cap of £3,420 for the average dual-fuel tariff in October, and subsequently up it to £3,850 in January 2023.
The move will mean that British households will be "facing a bill of £500 ($611) in January alone," given that gas consumption significantly increases during the winter season, according to the report. The Guardian added that if BFY Group's forecast is correct, the energy price cap would increase by more than £2,500 throughout 2022, affecting over 22 million Brits.
The developments come against the fallout of western sanctions slapped on Russia over its special operation to demilitarise and de-Nazify Ukraine. The sanctions hit UK consumers, who are also grappling with petrol pump prices at 186p per litre, much higher than elsewhere in the EU.