Energy price cap: Bills rise with warning of more pain ahead

Household energy prices have risen with little respite expected for bill payers for the remainder of the year.

Ofgem’s second price cap increase this winter comes into force on Wednesday and means someone paying by direct debit and using the normal amount of gas and electricity will pay £1,738 a year.

This is £21 a year more than the previous cap, so bill payers are being urged to submit meter readings to avoid overpaying on estimated usage.

Bills are about 50% higher than pre-Covid levels, and analysts predict they will rise another 3% in April.

The regulator, Ofgem, which covers 26 million households in England, Wales and Scotland, has urged people to shop around for the best deal.

The best fixed-price deals are cheaper than a tariff based on a price range.

While these deals offer certainty, anyone who signs up misses out on the risk that prices will drop before the fixed-term expires.

Due to higher wholesale prices, analysts at energy consultancy Cornwall Insight forecast an additional increase in the price range of around 3% in April. He predicts prices will fall in July, only to rise again in October.

In 2022, when the conflict between Russia and Ukraine started, prices increased.

Analysts and regulators acknowledge prices and global conditions are still volatile and difficult to predict.

“As we look ahead, consumers should be prepared for continued volatility,” said Craig Lowry, principal consultant at Cornwall Insight.

Many households will be concerned about just a 1% increase in energy prices during the coldest time of the year.

Campaigners are calling for an insulation program to help those in the hardest financial situations to cut their bills.

“We need a long-term solution,” said Caroline Simpson of Warm This Winter, which speaks for 40 charities.

The cap affects a fixed, variable tariff, and is set every three months by Ofgem.

The regulator explains the change by showing the impact on a typical household’s annual energy bill – which works out as £1.75 extra a month compared to the previous cap.

To estimate the impact on an individual’s annual spending, bill payers can add 1.2% to their current bill.

The cap is 10% lower than the same period last year, but Ofgem has said many bill payers will still be hit.

Millions of pensioners Will no longer receive winter fuel payments. To help bills, as it now means test.

Energy companies are urging those not on smart meters to submit accurate readings immediately.

“If you leave it after that, some of your December energy use may be overestimated and therefore charged under the higher January rates,” said Elise Melville. From price comparison website Uswitch.

While the cost per unit of gas and electricity is limited, the total bill is not. Therefore, a long, cold winter can lead to higher energy usage and higher bills.

More important long-term options to lower bills include shopping around or reducing energy use when possible, experts say.

At The Grange Community Center in Blackpool, experts are on hand to offer guidance to visitors, including support worker Sean Toussen.

“I would always tell people as long as they can online, go and see what different prices are available,” he said.

“If you don’t qualify online, they can get on the phone and call your current provider or another provider and compare prices.”

A period of high prices means households have accumulated a total of £3.8bn in debt to suppliers.

The average household in arrears owes more than £1,500 for electricity and £1,300 for gas.

Community support worker Alan Ryan said anyone struggling should seek help.

“My top tip is to get out and find your local community center, whether it’s a library or a community center and get involved. It will help you keep your bills down at home,” she said. “

The latest price changes mean:

• Gas prices are capped at an average of 6.34p per kilowatt hour (kWh), and electricity at 24.86p per kWh – up from 6.24p and 24.5p respectively. A typical household uses 2,700 kWh of electricity and 11,500 kWh of gas a year.
• Households with prepaid meters are paying slightly less than those with direct debit, with a typical bill of £1,690.
• People who pay their bills every three months by cash or check are paying more, with a typical bill of £1,851.
• Standing charges – a fixed daily charge that covers the costs of connecting to the supply – have fallen sharply to 60.97pa day for electricity and 31.65pa day for gas, compared with 60.99p and 31.66p respectively. Although they vary by region.

• If your hot water is too hot to wash your hands, your setting is too high so turn the boiler down.
• Manage your drafts by placing a black bag with shredded paper over an unused fireplace, or try to limit other drafts around the house.
• Limit time in the shower to four minutes. The charity Water Aid has compiled one. A playlist of four minute songs To keep you on time
• Consider using a steamer instead of placing separate pans of potatoes and vegetables on separate gas hobs.
• Use LED light bulbs in lamps.