A little over a year ago the energy price cap was something of an obscure dull administrative term, well-known by those working in the energy sector but not by many beyond that. Today it is headline news, with Ofgem announcing a sharp fall in the cap, falling to £2,074. This will come as a relief to many who have faced increasing utility bills and a cost-of-living crisis.
Savanta have been tracking attitudes to energy and utilities for more than 12 months via BrandVue, our market-leading brand tracker, meaning we have plentiful data about the impact the cost-of-living crisis has had on people’s attitudes to energy and utility bills. In April more than a third (35%) of people said their household had cut back on a utility because they could not afford it. Underneath this overall figure, the different impact it has on various generations is noteworthy.
The generational gap
Exploring the four most prominent generations today, we see that whilst Baby Boomers stand out as the least directly impacted, almost a third (32%) still have felt the need to cut back on utilities.
However, there is a clear generational gap and the biggest is between the oldest and youngest generations. Despite many of Gen Z still living at home with their parents, they are noticing their household’s struggle to pay their utility bills, with one in ten (11%) saying they have had a utility cut off due to not being able to afford it.
It is also more common for Gen Z to have seen their household cut back on a utility (38%), than to have not had any struggles with utilities, and if we average the findings over time, an interesting pattern emerges:
There is a clear pinch with Gen Z that began in the summer of 2022 and really impacted them over the winter, where the proportion of those saying they had cut back on a utility (35%) and those saying that none of our four utility statements applied to them (36%) became almost equal. Whilst this was not the same for Baby Boomers, as winter wore on there was a marked increase in those cutting back on their energy use.
It will be interesting to see how these trends continue and if they now change as the price cap comes down. With the challenge of net zero becoming ever greater, there will be significant investment needed ranging from grid upgrades and the integration of smart networks all the way through to wholesale new energy infrastructure.
Gen Z have generally been much more willing to pay for green energy, whether that will remain the case having experienced more significant impacts as a result of high energy prices will need to be seen.