ENERGY bills are due to fall by £151 a year as the new price cap comes into force tomorrow.
But most households will still feel poorer as the support the Government offered last winter is not returning this time.
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It means that a household with typical gas and electricity use will pay £160 a month this year, up from £141 last year when the Government applied a £67 discount to bills for six months.
Lower energy prices have now kick-started competition in the market and suppliers are once again offering fixed-rate tariffs.
But it can be tricky to work out what’s a good deal.
Here, we help you weigh up the options . . .
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HOW DOES THE CAP WORK?
THE price cap means that annual bills for typical usage will fall from £2,074 to £1,923.
This is down from £2,500 a year ago, but at that point Government bill discounts brought the real cost to £2,100.
The cap is on the price you pay per unit of energy and not your overall bill, so if you use more than average, your annual bills will be higher than this.
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You will also pay around £129 per year more if you choose not to pay bills via direct debit.
But this excludes customers on pre-pay meters, who no longer have to shell out more for their energy thanks to new rules that came into force in July.
Campaigners have warned that the poorest households with the lowest energy use will be worst hit this winter because although the overall price cap has fallen, standing charges have increased.
This means that even before you turn on the heating or lights, the daily charge you pay just for being connected to the grid is higher.
IS NOW THE RIGHT TIME TO FIX?
SUPPLIERS have started offering new fixed-rate tariffs to new and existing customers.
Some of the best on offer are in line with the new price cap, meaning that at the moment you would pay the same as you would on a standard variable tariff.
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But Scott Byrom, chief executive of comparison site The Energy Shop, says that based on current forecasts, households with typical energy use would save £170 a year by staying on their variable tariff.
That’s because although the price cap is predicted to rise in January, it’s forecast to drop again in April — but those who opt for a fixed rate now would be locked into current rates.
He says: “The best fixed-rate tariffs we’ve seen are around the same as the new price cap, so customers won’t save money by switching.
“These deals can also carry large exit fees of up to £150. I’d wait and see if suppliers launch more competitive tariffs.”
Ovo Energy, for example, is offering a one-year fix that would cost £2,096 with typical usage.
But taking into account the expected rise and fall of the price cap, someone on a variable tariff with the same usage would be likely to pay £1,926.
However, some customers prefer locking into a fixed tariff so they can budget for the year ahead, knowing exactly what they will pay each month.
Gareth Kloet, energy expert at comparison site GoCompare, says: “If you really value certainty, you might feel it’s worth paying a little extra for that peace of mind.”
Moneysavingexpert.com has a calculator to help you decide what to do, based on your energy needs.
WHAT HELP IS AVAILABLE NOW?
HOUSEHOLDS receiving the Guarantee Credit portion of Pension Credit can get the Warm Home Discount, which reduces energy bills by £150.
You might also be eligible if you are on Universal Credit, Housing Benefit or certain other low-income benefits and have high energy costs.
Anyone born before September 25, 1957, can get a Winter Fuel Payment worth up to £600, including a Pensioner Cost Of Living Payment of up to £300.
Households claiming certain benefits such as Pension Credit can also claim a cold weather payment of up to £75 if temperatures are below zero degrees for seven days running.
HOW ELSE CAN I CUT BILLS?
STICKING draught-proofing tape in the gaps around windows and doors could save around £45 on your energy bills, according to Energy Saving Trust.
You can buy a roll on Amazon for around £5.
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Make sure not to block up any vents as these allow fresh air into the home to prevent damp.
If you have a chimney, filling the gap with a draught excluder could save an additional £65, the trust says.
Keeping the curtains drawn in the evenings will help to prevent heat escaping, but make sure you do not cover the radiators or you will block warm air from circulating.
Turning your thermostat down by one degree and layering up could save you up to £100 a year, Energy Saving Trust adds.
BRITISH GAS PAYMENT ‘SLIP-UP’
BRITISH Gas has scrapped payment slips on paper bills, making it harder for thousands of customers to settle up at post offices, banks and shops.
The energy giant has come under fire from campaigners for removing bank giro credits without warning.
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Charities warn that low-income, older and vulnerable customers will be worst affected because many don’t bank online and pay on receipt of bills to keep in control of their budget.
James Daley, managing director of consumer group Fairer Finance, said: “Many people still rely on paying via the post office and shops with Payzone points, so it’s callous of British Gas to suddenly make these methods harder for their customers to use.
“Changes like this need to be carefully managed and communicated – and it would seem British Gas has managed to do neither of those things.”
Caroline Abrahams, charity director at Age UK, added: “It’s almost inconceivable that a business would make it harder for its struggling customers to pay their bills during the cost-of-living crisis.”
British Gas said it has only removed the slips from bills of customers who were not using this payment method.
But Sun reader Ian Edmondson, 61, from Poulton-le-Fylde, Lancs, said he usually paid by giro and was given no warning before the option was removed.
The recently-retired Environment Agency officer said: “It happened out of the blue and means I can’t pay my bill at my local post office until I request its reissue.
“I’ll now need to wait until I receive my next quarterly bill in December.
“It’s a disgrace that British Gas has done this without warning.”
Mr Edmonson said he pays by giro to help with budgeting and because he feels less vulnerable to online scams.
Customers using giro would take the slip to a Payzone store then make the payment with cash, a cheque or a bank card, where it would normally be processed within three working days.
A cheque sent by post is not tracked in the same way and can take up to five days to process.
And if customers forget to put their account number on the cheque it can take longer.
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A British Gas spokesperson said: “We’ve not made any changes for customers who currently pay by giro, as we understand it’s important to be able to pay in their preferred way.”
Customers wanting to add a giro slip back on to their paper bill should call British Gas on 0333 202 9804 or get in touch via the live chat on its website.
This post first appeared on thesun.co.uk
