Energy bills are set to rise for millions of households this winter as the energy price cap is increased to £1,717 a year. Ofgem announced that the cap will see a 10% hike from its previous level of £1,568. This change will come into effect from October 1 and will remain in place until December 1, impacting many households as they prepare for the colder months. The average household using direct debit for gas and electricity will see an annual increase of £149, equivalent to around £12 more per month.
The rise in the energy price cap is attributed to escalating prices in the international energy market, influenced by heightened political tensions and extreme weather events. Despite the cap being raised, it is important to note that it does not limit the overall energy bill but rather caps the amount paid per kilowatt hour. The average energy bills are still lower compared to the peak of the energy crisis earlier this year following Russia’s invasion of Ukraine.
Jonathan Brearley, Ofgem’s chief executive, acknowledged the difficulty this increase poses for many households and encouraged those struggling to pay their bills to explore available benefits such as pension credit. He advised consumers to seek support from their energy provider and consider switching to a fixed-rate tariff to potentially save money. Secretary of State for Energy Security and Net Zero, Ed Miliband, expressed concern over the price hike, blaming it on the existing energy policy and advocating for a shift towards clean, domestically-produced energy sources to enhance energy independence.
As households brace themselves for higher energy costs this winter, the call to explore financial support options and alternative tariffs is increasingly crucial. Consumers are advised to stay informed and proactive in managing their energy expenses during these challenging times.