It has called an emergency summit meeting with Ofgem, the energy regulator, and the six main energy firms to try and tackle soaring gas and electricity costs.
Recent price hikes mean we will now be paying an
average of £155 a year more for our gas and electricity. With many households already struggling to make ends meet each month, this increase will push some over the edge.
Prime Minister David Cameron said: "We can't control volatile world energy prices. But we can still help people get their bills down.
"So today we are bringing together the industry, consumer groups and Ofgem for an energy summit that will focus on getting people the help they need to reduce their bills in time for this winter."
Recent research from MoneySupermarket found that
71% of people will be forced to turn to their savings, credit cards or overdrafts to cover the costs of rising bills this winter.
Scott Byrom, energy expert at MoneySupermarket, said: "It's good to see the government tackling the issue of rising energy costs head on.
"However, bill payers shouldn't hang their hopes on the meeting, and any changes to the market are likely to take time to implement.
"Now is the time to make a stand as individuals and seek out the best energy deal for your household - you could cut an average of £237 off the cost of your annual bill." What is the government planning?
The government believes that the huge number of complicated tariffs available is one of the reasons so many people aren't benefiting from the cheapest deals.
One of its main aims is therefore to simplify the switching process - something that MoneySupermarket has been doing for years.
It also wants to encourage more people to cut their bills by taking energy saving measures around the house.
From next year, the government's Green Deal will offer
improved insulation for everyone at no cost.
In the meantime, to help people warm their homes immediately, it is giving the most vulnerable households free or heavily subsidised insulation, delivered by the energy companies.
Cameron said: "The easiest ways to get energy bills down quickly are to get people paying the lowest possible tariffs and reduce the amount of energy that is wasted."
The government also plans to tackle the problem of rising bills by encouraging new players, such as supermarkets and co-operatives, to enter energy markets - increasing competition.
What about the energy companies?
Some of the major energy providers have also announced measures aimed at helping customers struggling to pay their bills.
British Gas, for example, is introducing a "Warmer Winter" package including a commitment not to raise energy prices this winter, a discount for low-income customers, free insulation and flexible payment plans.
Meanwhile, rival npower is freezing prices and putting an end to doorstep selling.
And E.ON is introducing a number of measures and initiatives ranging from free insulation to tailored, in-home advice for the most vulnerable customers.
Will my bills fall then?
Unfortunately, the answer to this is probably not, unless you make major changes to your home to reduce energy consumption.
Essentially, it is getting more expensive to get fossil fuels out of the ground, and requirements to invest more in green energy also come at a price.
It therefore costs more for suppliers to source the energy they sell - a cost increase that they inevitably pass on to consumers.
And the bad news is that things are not set to get any better. As British Gas said today, the unit price of energy is probably heading "only in one direction".
Luckily, however, you can take matters into your own hands by switching to a better deal with MoneySupermarket.
How much can I save?
Finding the right tariff for your consumption level and region means average savings of
£237 per year.
Byrom said: "The latest price increases have added an average 17.4 per cent to the cost of gas and 10.8 per cent to the cost of electricity, resulting in average annual standard bills of £1,287, so now really isn't the time to be apathetic."
The cheapest online tariff available at the moment is npower's Sign Online 24 with annual bills of £1,050 on average.
However, for the same price, consumers can protect themselves against future price rises with either EDF Energy's Fix for 2012 tariff with bills fixed at £1,050 until December 31st 2011, or OVO Energy's New Energy Fixed product at a set price for 12 months.
comparison calculator to find the best deal for you and cut the price you pay for gas and electricity now.
Please note: Any rates or deals mentioned in this article were available at the time of writing.
Rate This Article
Click on a star to rate this article.