ENERGY bills are set to rise by £139 a year for 11millions Brits, Ofgem has confirmed.
The Sun last week exclusively revealed that the regulator planned to increase the price cap for gas and electricity, and it’s now been announced.
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The price cap, which is set twice a year depending on wholesale costs, limits the rates a supplier can charge for their tariffs.
The move affects 11milllion households on default tariffs, which are those who stayed loyal to their supplier and didn’t switch in the past year.
Their bills will go up on October 1 from the current £1,138 to around £1,277 – the highest since the cap launched in January 2019.
It’s a blow for families who have seen the price cap keep bills under wraps until now – after a campaign by The Sun to stop punishing loyal customers.
How to save on your energy bills
SWITCHING energy providers can sound like a hassle – but fortunately it’s pretty straight forward to change supplier – and save lots of cash.
Shop around – If you’re on an SVT deal you are likely throwing away up to £250 a year. Use a comparion site such as MoneySuperMarket.com, uSwitch or EnergyHelpline.com to see what deals are available to you.
The cheapest deals are usually found online and are fixed deals – meaning you’ll pay a fixed amount usually for 12 months.
Switch – When you’ve found one, all you have to do is contact the new supplier.
It helps to have the following information – which you can find on your bill – to hand to give the new supplier.
- Your postcode
- Name of your existing supplier
- Name of your existing deal and how much you pay
- An up-to-date meter reading
It will then notify your current supplier and begin the switch.
It should take no longer than three weeks to complete the switch and your supply won’t be interrupted in that time.
A further 4million households with pre-payment meters will see their bills jump by £153 – from £1,156 to £1,309.
If you’ve been with the same supplier for a while, make sure to shop around in case you can switch to a cheaper deal.
In some cases you could save hundreds of pounds a year.
The best value fixed deal currently available on the market is £1,035 a year from Avro Energy, which is £242 cheaper than the new price cap.
Of course, it’s worth bearing in mind that the actual price you pay on a fixed-rate tariff will depend on how much energy you use.
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Payment meter customers have to pay a fee to change their meter for a standard one if they want to take advantage of the best deals.
However, many have no option but to continue to pay the price hikes because there is a charge to swap meters and renters will have to get permission from their landlords first.
James Plunkett, executive director of Citizens Advice, said: “This price hike could lead to a perfect storm for families this autumn, hitting people at the same time as a Universal Credit cut and the end of furlough.
“It’s particularly worrying given families on Universal Credit are far more likely to already be in energy debt.
“With bills rising and incomes falling, many families will find it hard to escape.”
While Tashema Jackson, consumer champion at Energyhelpline, added: “Now really is the time to get on top of your gas and electricity bill by signing up to a fixed energy deal.
“By switching today you can ensure you get the best deal currently available, add some certainty to your finances and avoid being stung by a 10% hike in your bills.”
Some customers may be eligible for extra help such as payment breaks and emergency credit to top up prepayments.
Low income households, especially pensioners, could get a £140 rebate off their energy bill under the Warm Home Discount.
Millions of Brits will be switched to cheaper energy tariffs automatically under new plans, saving them hundreds of pounds a year on bills.
Martin Lewis is urging bill payers to switch energy deals now to save hundreds of pounds a year before prices rise.
Try our 10-minute energy switch challenge to cut your bill by up to £250.
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