Act now to beat £139 a year rise in energy bills
Millions of householders were given an electric shock this month with the news that energy prices are going up in October by around 12 per cent a year.
Regulator Ofgem is putting up the price cap which will mean the typical dual gas and electricity customer bill is likely to rise by £139 to £1,277 a year while prepayment customers will see an increase of £153, from £1,156 to £1,309.
“It will hit struggling families hard with their budgets already stretched to the limit and now they face a double whammy in the autumn,” said Midlands energy expert Ron Fox. “It is when the colder weather begins and bills rise and on top of that they could face losing an extra £20 a week from Universal Credit at the same time.”
The price cap, set twice a year by the regulator, affects 11 million households in England, Wales and Scotland who have never switched suppliers and who are variable deals. Northern Ireland sets its own cap.
It sets the prices that suppliers can charge for each unit of energy, but there is no limit so the more gas and electricity people use, the higher the bill.
The increase will hit about 15 million UK households, while the remainder on fixed deals will not be affected. But around four million prepayment meter customers will also pay more.
However, Ofgem pointed out that households were better off as the cap is estimated to keep tariffs about £75-£100 a year lower than the price suppliers would otherwise have charged. They said the reason for the rise was because wholesale prices had soared as many economies recovered, causing a surge in energy demand.
“But,” said Ron, “for those struggling to pay their bills I would advise them to contact their supplier where they can get access to a wide-range of help and support.
“Also, they don’t have to accept a variable tariff, they can switch to a cheaper fixed deal, with either their supplier or a rival, as this can save them up to £200 a year.”
For those who wanted to move supplier Ron said firstly they should enter the tariff and their energy usage from their most recent bill on a price comparison site which will suggest the cheapest supplier. If they are happy people can organise the switch online and it should be completed within weeks with no interruption to supply.
“I have every sympathy for those close to the poverty line,” said Ron, of Noreus Ltd on the University of Keele Science and Innovation Park in North Staffordshire. “I think the government should help them more by widening the current warm homes discount scheme and reverse the £20 Universal Credit cutback.”
But he said an even cheaper solution in the long term would be to switch to green energy. For advice about that call Ron on 0845 474 6641.
Caption: Powerful increase – electricity and gas prices will rise by around 12 per cent in October for millions of householders.