What you can do about surprise 6.4% energy price rise

With energy bills for a typical household rising by more than £100 a year next month, what can consumers do to cut their costs?

Midlands green energy expert Ron Fox gives his thoughts after regulator Ofgem announced a higher-than-expected increase of 6.4 per cent from April in the energy price cap.

It will mean a household using a typical amount of gas and electricity will see their annual bill rise by £111 a year to £1,849, adding pressure on people’s finances at the same time as water and council tax bills rise.

This is 9.4 per cent, or £159, higher than this time last year and £531, or 22 per cent lower, than at the height of the energy crisis at the start of 2023.

But those on pre-payment meters will pay on average £1,803, slightly less than those on direct debit and those who pay their bills by cash or cheque.

The cap, which is set every three months and limits the amount suppliers can charge for each unit of energy, will affect 22 million homes in England, Wales and Scotland.

The regulator said rising wholesale costs, international gas prices and inflation were behind the latest energy price hike – the third consecutive increase in the quarterly cap and more than the 5 per cent analysts had forecast.

While the cost of each unit of gas and electricity is capped, the total bill is not, so bills will vary depending on how much energy is used. So, what should householders do?

Firstly, said Ron, bill payers could consider switching to a fixed tariff to try and lower costs by checking whole-of-market comparison sites for the best deal. This would provide certainty over future payments. But the problem is being tied to a long contract if prices were to come down in the short term.

Secondly, anyone worried about paying their bills should contact their supplier for help. About four million households have done so in recent months, Ofgem said. And Citizens Advice said its research suggested 6.7 million people in England, Wales and Scotland were in debt to their energy supplier. Official figures show nearly £4bn is owed.

Thirdly, Ron said residents could make adjustments around the home to reduce energy bills. These include turning the boiler down if the water is too hot for your hands; sorting out any draughts and making sure you have enough home insulation. Finally, limiting your time in the shower to four minutes. The charity WaterAid has compiled a playlist of four-minute songs to help you keep to time.

“But there is some good news,” added Ron, of Noreus Ltd which is based on the University of Keele Science Innovation Park.

Firstly, standing charges, the fixed fees to connect to a gas and electricity supply which vary by region – are dropping for electricity, although they are rising again for gas. They have fallen to 53.8p a day for electricity but risen to 32.67p a day for gas, compared with 60.97p and 31.65p respectively, although they vary by region.

Secondly, some experts are predicting prices will fall slightly again in July when Ofgem announce the next energy price cap.

Thirdly, the regulator has extended the Debt Allowance Scheme to help customers cover the cost of that debt.

Fourthly and finally, the government has announced it is planning to extend the number of people who qualify for the Warm Home Discount scheme next winter – which gives some people on benefits a reduction of £150 from their annual energy bill.

For more advice on green energy, putting in more home insulation and reducing energy bills, contact Ron on 0845 474 6641 or go to www.noreus.co.uk.

Caption: Going up again! Energy bills for a typical household.