Energy bills could swallow three months of average pay in Scotland from this winter...that’s every last penny

New analysis, which lays bare the extent grave hit on Scotland from predicted rises in the energy bills price cap set by the market regulator Ofgem reveal a widening postcode lottery of fuel bills, with the gap in prices between the highest and lowest dual fuel bills across the Scotland's local authority areas set to double between now and January to nearly £3000.

The gap has already widened from £728.07 in April, last year to £1377 now.

Age Scotland, the national charity for older people now fears that the number of older households in extreme fuel poverty - spending more than 20% of their income on heating - will now more than double to over 250,000 based on the forecasts.

It comes as concerns have surfaced that only a small percentage of Scottish households in fuel poverty are benefitting from government support to make homes energy efficient.

New figures have revealed that the number of households receiving support under the scheme, has dropped by almost half since 2016.

The bills analysis, which takes into account energy usage, is partly based on predictions made by consultants Cornwall Insight and others that the price cap will rise by around 81.7% in October and then a further 19% in January, when energy usage peaks.

Energy consultants Auxilione, in another grave prediction shared with the Herald on Sunday said that the typical UK household is set to see monthly payments for January nearly quadruple from £153 last year to £571.

Frazer Scott, chief executive of Energy Action Scotland, the only national campaign organisation set up to end fuel poverty in the nation, said urgent action was needed over the "eyewatering figures" over the prices rises fearing a "catastrophic loss of life" this winter.

"These high costs are a terrifying prospect. And the scale of support that has been provided just doesn't touch the sides," he said.

"In some areas that are reliant on electricity, in rural areas there are eyewatering figures. It is just an unaffordable amount of money as a proportion of your income.

"We need targeted support that recognises this. Yet so far neither the UK government or the Scottish government in its responses has so far provided any significant targeting to those communities and it needs to do so.

"There has to be an intervention that pulls down the cost for people of energy."

Around 1.5m Scots households saw their energy bills rise in April after Ofgem hiked the bills price cap by the biggest increase yet. From April 1, the three in four customers on default tariffs paying by direct debit saw an increase of £693 from £1,277 to £1971.

The figure given for the price cap is based on what an average UK household uses. Those who use more than average will have to pay more, and those with less usage will face smaller bills.

The cap is based on the wholesale energy price that suppliers pay to buy energy which they then sell on to households.

Across Scotland the typical dual fuel bill which has already nearly doubled from £1375.97 last year to £2600.56 now is set to more than double by January. Based on the forecasts, the typical Scot will see bills in January cost more than two months of the average take-home pay unless governments intervene.

Average annual bills in Scotland are set to reach £4725.26 a year in October and then £5623.05 in January. The average monthly take home pay for a Scot is at just £2,106.86.

But in the postcode lottery of average dual fuel energy bills in local authority areas, people on Argyll and Bute, which includes the islands of Bute, Islay, Jura, Mull, Iona, Coll and Tiree, are predicted to see prices quadruple since last year.

The Herald can reveal that Argyll and Bute face the highest costs of the 32 local authority areas in Scotland with average annual dual fuel bills soaring from £3,481 now to £7527.79 in January.

That is nearly two thirds more the typical household will be forecast to pay in Glasgow City in January, which at £4550 will be the cheapest areas for bills in Scotland.

Residents of Comhairle nan Eilean Siar, the council that covers the Western Isles face the second highest bill hikes with average prices to soar from £3316.58 to £7171.21.

And in the Shetland Islands bills are forecast to rise from £3245.65 to 7017.85.

Housing experts say one of the reason for the energy bill gap the condition of the housing stock, colder and wetter weather, and the limited availability of gas in rural Scotland meaning many only heat their homes with oil or electricity which is more expensive.

There is also the extra costs in supplying and distributing electricity to northern Scotland which is said to be 2p more per kilowatt hour than in the south. That extra cost is passed on to the consumer through network distribution charges and there have been calls to have them scrapped.

Orkney and Shetland MP, Alistair Carmichael, who is the Liberal Democrats' home affairs spokesman is pushing for an “energy furlough scheme” to cut energy bills in the face of record prices.

The plan would save Scots over £2000 a year by cancelling the price cap expected to be announced by Ofgem for October, with the Government instead paying the shortfall to energy suppliers so that they can afford to supply customers at the current rates. The government would recoup the cost by expanding a windfall tax on oil and gas company profits, and using higher-than-expected VAT revenues.

“Fuel poverty is already a longstanding issue across rural and island communities in Scotland and we know that past price hikes have hit our communities harder, from Argyll to Unst. The coming energy price rise in October is only likely to exacerbate the disparities in fuel poverty that we already witness in the Highlands and Islands," he said.

“That is all the more reason why we need bold action, as the Liberal Democrats have called for, to stop the energy price rise in its tracks and protect vulnerable communities. No other party has truly grasped the scale of the tsunami facing families this winter. Forget “heating or eating” – this will be a choice between freezing and starving for people in the Highlands and Islands and beyond, if we do not act.

“This plan is about protecting families but it is also about providing confidence for our economy. If businesses and households can look to the other side of winter with the assurance that bills will remain stable, then other fiscal pressures are likely to lessen. The first step, however, is assured action right now.”

Adam Stachura, head of policy with Age Scotland said: “If you consider how unmanageable energy bills are for people right now, I shudder to think how anyone is going to be able to cope come the winter. These forecasted increases will sink household budgets and cause a spike in fuel poverty levels unlike anything we have ever seen before.

“Older people live in some of the least energy efficient homes in the country. More than a hundred million pounds is invested by the Scottish Government every year into energy efficiency measures and support but our research shows that more than half of older people have no idea how and where to access this. We need to see the Scottish Government do a better job of taking the financial support directly to them, particularly to those households on the lowest incomes."

Scottish Liberal Democrat leader Alex Cole-Hamilton has urged the Scottish Government to put a rocket under the support scheme for households in fuel poverty after it emerged that just a small percentage of households have benefited from support and that it could take the government more than 300 years to insulate every fuel poor household.

Launched in 2015, the Warmer Homes Scotland scheme was designed to provide energy efficiency measures such as wall and loft insulation to fuel poor households and claims to have supported more than 27,000 homes and families across the country.

The Scottish Government’s own estimates suggest that as of April 1, 874,000 households are in fuel poverty including 593,000 in extreme fuel poverty New figures have revealed that the number of households receiving support under the scheme, has declined from 5,326 in 2016/17 to 2,904 homes in 2020/21.

The Liberal Democrats say that at the rate in 2016/17 it would take 164 years to insulate every household. At the 2020/21 rate it would take 301 years.

Mr Cole-Hamilton said: “The snail’s pace this scheme has advanced at illustrates the SNP’s frightening incompetence when it comes to tackling fuel poverty and the cost-of-living crisis. “Bills will continue to soar and families will continue to suffer unless more support is made available to those in need. Cutting energy bills through improving energy efficiency will not only lessen the burden on household finances, it will be good for the planet and bad for Vladimir Putin too. The Government need to put a rocket under the Warmer Homes Scotland scheme."

Energy Action Scotland suggested a social tariff should be brought in to ease the price hikes for those in fuel poverty, paid for by those who can afford to pay or through government support.

Mr Scott said: "There are things government can do quite quickly to intervene for some of the most low income households," he said.

"People have already been resorting to desperate measures to heat. It is desperate to travel round on public transport - using free bus passes - for warmth and comfort, or have to visit public buildings in great numbers.

"We know of examples where people have ripped up floorboards and burn them for fires to stay warm, burning clothes, smashing up furniture, burning anything and putting their lives at risk just to stay warm. But when people are desperate that is what they will do.

"That is why government has to act fast."

Auxilione has predicted that the average family’s annual UK energy bill could reach nearly £5,300 from April if current sky-high wholesale prices for gas and electricity do not fall soon.

It predicts that the price cap on energy bills could reach £3,628 in October, from £1,971 today, then rise again to £4,538 in January and peak at £5,277 in April.

It is the bleakest forecast yet for the millions of households set to face crippling bills this winter.

A Scottish Government spokesman said: “People are rightly concerned about the current crisis and the UK Government holds most of the powers needed to tackle it. That is why the Scottish Government continues to urge UK Ministers to use all the powers at its disposal to provide immediate support to address the current crisis households, families and businesses are facing. We will continue to do everything within our resources and powers to help those most affected by the cost of living crisis."

The spokesman added: “The ongoing energy bills crisis has highlighted that short term help with household costs must go hand-in-hand with longer-term action on energy efficiency and heating programmes to secure warmer, greener and cheaper heating for everyone in Scotland.

“The Warmer Homes Scotland scheme is ultimately a demand-led scheme. Whilst delivery was impacted by the Covid pandemic – in common with all construction and home improvement work at the time - more than 5,300 households were supported in 2021/22 – among the highest figures since the scheme began.

“A record level of £55m million is being invested in the Warmer Homes Scotland scheme in 2022/23, which is helping households in fuel poverty make their homes warmer and more affordable to heat.

“Warmer Homes Scotland is by no means the extent of our investment in tackling fuel poverty, making our homes more energy efficient and reducing household bills. Through other initiatives such as our Area Based Schemes, over 150,000 households now live in homes which are warmer and cheaper to heat, with households saving an estimated £936 million pounds on their fuel bills over the lifetime of these improvements. We will invest at least £1.8 billion over the course of this parliament to support heat and energy efficiency.”