Everything you need to do NOW ahead of energy price hikes next week

BUDGET-BUSTING bill hikes will hit million of Brits next week adding hundreds of pounds to household costs each year.

Around 22million homes are on standard variable tariffs which are subject to the energy price cap.

1

The cap will rise on April 1 from £1,277 to £1,971 – an increase of £693 for the average dual fuel bill.

But the exact amount more you pay will depend on your usage and where you are.

It’s not just energy price rises that are putting pressure on household budgets from next month.

Other costs are going up including council tax bills and supermarket shopping prices.

We explain all the things you need to do to get ready for price hikes in April.

Take a meter reading

You need to take a meter reading before energy prices go up on April 1.

MoneySavingExpert founder Martin Lewis said everyone who pays their bill by direct debt should take a reading on March 31.

More than half of UK households rely on direct debits to pay their bills, according to Ofgem, the energy regulator.

Martin said: “That way you draw a line in the sand that says to your energy firm, I’ve only used this amount at the cheaper rate, don’t start charging me more on the higher rate and estimating I use some of it afterwards.”

The amount you pay for energy via direct debit is “smoothed” out over a year.

It means you pay the same amount each month, even when your energy usage changes.

For example, you generally use more gas and electric in winter and less in summer.

But the charge for that energy will change on April 1, so taking a reading the day before on March 31 means you – and your energy firm – know exactly how much energy you have used under the lower price.

And you then have a clear date from which the higher prices apply.

Check for grants

Your energy firm might run a hardship fund to help you cope with the impact of price rises.

For example, British Gas has a scheme offering customers up to £750 to put towards energy debts.

Octopus Energy gives out grants of up to £500 to struggling customers.

You could also get in touch with your local council to see if they are still running the Household Support Fund, although many of those schemes have closed.

Charities and other organisations often offer grants and you might be able to spend that money on energy costs.

You can search for these kind of grants on the Turn2Us website.

Switch to direct debit

If you don’t pay your bills by direct debit, switching could save you £90 a year.

Suppliers often give favourable rates to customers who pay by direct debit.

Setting up a direct debit means the money will automatically go out of your account at the chosen date and time.

You can time it to go out every month or every three months, so you need to make sure there’s enough cash in your account at that time.

Otherwise you could be hit with late payment fees or end up in an unarranged overdraft.

The amount you pay will be estimated by your supplier and then divided by 12 to work out your monthly charge.

This means you might end up under or overpaying, and you’ll either build up debt or credit.

You can use the credit to reduce future payments or cover costs in colder months when you need to use more energy.

But if you’re in debt your bills might rise until you pay it back.

You should also look at how you pay your council tax bill.

People who pay by direct debit will get the £150 council tax rebate in April before those who don’t.

Use a benefits calculator

Another important thing to do is make sure you’re getting all of the benefits you’re entitled to.

You can use a free benefits calculator to check if you should be getting extra cash.

You might find you could get hundreds of pounds extra a year if you’re eligible for benefits.

Benefit calculators include:

They will work out whether you can access extra cash.

You’ll typically need to answer information about your living situation and employment to get an accurate figure.

If you live with someone else, you’ll also need to answer questions about them.

This is because how much you’re entitled to will depend on your total household income and how much you have in savings.

Don’t feel pressured to fix

Fixed deals used to be cheaper than the price cap, but are now more expensive so don’t feel pressured to fix.

For the majority of people it’s cheaper to revert to a standard variable tariff which is price capped.

The latest advice from money saving guru Martin Lewis is not to switch to a fixed deal unless it was less than 75% more than the current price cap.

Don’t switch unless its no more than 15% more than the April price cap.

The current price cap is £1,277 and it will be £1,925 from April 1.

You should keep an eye out for offers from your supplier as some are doing offers for existing customers.

DIY tips to save energy

If you’re worried about rising energy bills, there are things you can do at home to try and keep costs down.

Turning your thermostat down by just 1C can help you reduce your bills by £100.

Putting tin foil behind your radiators could save you £20 a year, according to British Gas.

It works by reflecting the hot air from the back of your radiator into the room, instead just blowing it against the wall.

This means that you won’t that it won’t be wasting energy – and adding money onto your bill.

Meanwhile, draught excluders could save you £74, clingfilm works as a DIY double-glazing tool to save £20 and switching to LED bulbs can reduce your costs by £232 a year.

Consider bulk buying

Customers on old-style prepayment meters could avoid price hikes for longer by stockpiling energy.

If you have a non-smart prepayment meter, you won’t have to pay the new higher rates until you top up for the first time after April 1.

This could delay the price rise as you’ll be charged the lower rate on any remaining credit.

But it might not be possible for everyone with a prepayment meter to put a lump sum towards their bills.

That’s because prepayment customers are often on a lower income or struggle with debt.

You should also be careful if you chose to stockpile and don’t use more energy than you usually do as this could end up costing you more.

Check with your supplier that they will honour the old price before you top up, and bear in mind it won’t work with smart meters.

Don’t miss out on a tax rebate

The new financial year starts on April 5, meaning you should make sure you’re not missing out any tax rebates.

For example, if you’re eligible for marriage allowance you need to apply now to avoid missing out on a free £230.

The benefit allows some people to transfer £1,260 of their personal allowance to their partner, reducing their tax by up to £252.

In addition to this year’s allowance, you can also get it for the previous four tax years -currently 2017/18, 2018/19, 2019/20 and 2020/21.

The tax break was worth £230, £238, £250 and £250 during those years respectively, meaning you can get up to £1,210 in total.

But if you don’t apply before April 5, you’ll miss out on the £230 for 2017/18.

This post first appeared on thesun.co.uk