Will energy bills go up this year and by how much?

FAMILIES will be wondering if any more energy bill hikes will hit their finances this year as the cost of living crisis continues.

Households battled eye-watering energy costs last year as millions were hit with two increases to the energy price cap.

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This is the limit on the rates an energy supplier can charge for its tariffs.

But changes to the cap saw bills jump by £96 in April, and by a record-breaking £139 in October.

The increases saw low income families hit the hardest, with many having to choose between heating and eating this winter.

Some families are having to put 50% more of their weekly budget towards gas and electricity costs.

We explain whether more hikes are in place for 2022 – and how you can avoid them.

Why are energy bills going up?

Soaring wholesale energy prices are to blame.

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Last year gas prices shot up more than 250% compared to where they started the year.

It meant that suppliers were struggling to cope with rocketing costs, because they were unable to pass them on to customers on a fixed tariff.

The problems led 26 providers to collapse last year, and more are predicted to go bust in the coming months.

As a result, some households are now being double charged after their provider has gone bust, with payments taken from both the old and new supplier.

These failures will also mean households will see an extra £85 at least added onto their bills from next April.

Will bills go up in 2022?

Unfortunately, it looks like households are facing even more hikes to their energy bills this year.

Families could be forking out as much as £3,700 a year within a matter of weeks if they sign up to the most expensive tariffs.

This is because 226 energy deals are set to finish by the end of March, at which point customers will have to find a new deal.

These customers are currently paying around £900 a year for energy – well below the price cap of £1,277.

It means that those on the cheapest deals will see their bills surge by around £400 to meet the price cap of £1,277.

And those looking to lock in to another fixed tariff could be facing a whopping increase of almost £3,000 a year.

That’s not to mention changes to the price cap expected to be announced next month.

The next price cap amount with be announced on February 5 and experts have said it could climb to a record-breaking £1,800 a year from April.

It’s meant that customers are scratching over their heads on whether or not to fix their bill or stick to the price cap.

Consumer champion Martin Lewis issued advice this week saying that it is best to stick to today’s cheapest deals – which is on the price cap.

However, it is uncertain what the best deals will be in the future – but experts are predicting bills could rise further.

Uswitch head of regulation Richard Neudegg said that although it’s hard to know what will happen to energy prices after this, there “are no signs of wholesale prices returning to where they were last year”.

What if I’m on a pre-payment meter?

Around 4.3million UK consumers use a pre-payment meter for their energy bills, according to Uswitch.

This involves paying for your gas and electricity use before you use it by topping up a meter at a shop or online.

These customers saw their bills go jump by £153 from £1,156 to £1,309 in October under the energy price cap changes.

These customers will also see costs go up this year like everybody else’s, Mr Neudegg said.

How can I avoid the hikes?

Unfortunately, the chances are you’re going to be paying more for energy this year.

But there are some ways to keep your bills under control.

Mr Neudegg said its best to keep to a standard variable tariff, as there are no fixed deals that offer “better value than the price cap”.

“It’s possible that more fixed deals could start to return to the market in the coming months, but they are currently very expensive and you’d lose the protection of the current price cap over the higher consumption winter months by moving now,” he added.

If you’re struggling to pay for your bills, then there are ways to get financial help for the costs.

Which? home products and services editor said: “Speak to your energy provider about a payment plan you can afford and check to see if you qualify for any government schemes, such as the warm home discount or cold weather payment.”

You can get £25 a week to help with energy bills during the winter under the cold weather payment scheme.

While the warm home discount scheme means you can a £140 payment that goes toward your heating costs.

These aren’t the only schemes where you can apply for help.

Through the Household Support Fund, councils can use cash in a number of ways to help people cover the cost of heating their home.

The help you can get varies depending on what your local authority is offering, but some councils are giving away over £100 for free.

Plus, some pensioners may be eligible for one-off winter fuel payments from the government of between £100 and £300.

This post first appeared on thesun.co.uk