Gas bills could rise by £1,000 for millions in UK under new energy proposals (2024)

Gas bills could rise by £1,000 for millions in UK under new energy proposals (Image: Getty)

Household gas bills could rise by a staggering £1,000 if proposals to transfer green levies go ahead.

Energy Secretary Claire Coutinho received a proposal to move some or all green levies from household electricity bills to gas bills, or incorporate them into general taxation, the Telegraph reports.

Officials at the Department for Energy Security and Net Zero (DESNZ) proposed the changes due to concerns that the burden of green levies on household costs is hindering progress towards net zero.

Green levies are charges added to energy bills to fund environmental and social initiatives, which help support the transition to cleaner energy sources and reduce carbon emissions.

These can include subsidies for renewable energy projects, energy efficiency programmes, and assistance for vulnerable customers, but they also increase the cost of household energy bills.

READ MORE: Overpaying a mortgage by £100 could save you upwards of £25,000

Low-income families, which account for almost half of gas households, would be hit the hardest (Image: Getty)

However, transferring the levies to gas bills could cause these bills to soar, disproportionately impacting low-income households who are reportedly most reliant on gas.

An analysis by gas distribution company Cadent found energy bills would increase by £1,045 a year for millions of families reliant on gas by 2035 if green levies were transferred from electricity to gas bills.

Low-income families, which account for almost half (47 percent) of energy bills for households reliant on gas, would be hit hardest by the move.

The report also found that by 2035, gas consumers would pay between £879 and £924 more annually in running costs than heat pump users.

Don't miss...
Inheritance tax expert answers 10 'common' questions - from pensions to gifts [ANALYSIS]
Carer’s Allowance offers ‘minimal' £1.63 per hour for 50 hours of care per week [INSIGHT]
Nationwide £100 cash handout for customers - how you know you're eligible [EXPLAINED]

Shifting the levies to gas bills would spread the costs among fewer households, with experts warning that this could worsen fuel poverty.

Ms Coutinho hasn't made any decision on the matter and is said to be willing to rule anything out that makes families worse off.

It is understood that she has not been happy with the advice presented to her so far, which is why no decision has been made.

The Telegraph said sources close to Ms Coutinho emphasised that the energy secretary’s primary goal is to reduce bills for households, and she will consider all factors through that lens.

• Food inflation warning as expert says there's one thing you need to consider
• HMRC explains how people can make a £252 ‘tax saving’ a year with this tip
• Thames Water price warning as Ofwat postpones bill cost review
• Bank raises interest to 5.12% on savings account and earns 'excellent' rating
• Britons waste ‘huge chunk of savings’ with £429m left on pre-paid cards