People across the UK have been advised to submit their energy meter readings promptly as a 10% price increase comes into effect. The average household energy bill is set to rise by £149 per year starting from Tuesday, as Ofgem raises its price cap just as the winter season commences. This surge affects almost 10 million households, with the price cap for a typical dual fuel household in England, Scotland, and Wales increasing from £1,568 to £1,717, translating to around £12 more on average monthly bills.
Households on a standard variable tariff (SVT) without a smart meter are particularly urged to ensure they provide their electricity and gas readings to their supplier to avoid potential overpayment for energy used before October 1 at the elevated prices. Failing to send in meter readings results in suppliers basing bills on estimated usage, leading to the risk of overpayment or underpayment. The price cap determines the maximum price energy suppliers can charge consumers per kilowatt-hour of energy consumed, with households paying based on their actual energy usage.
Effective October 1, households on an SVT paying for electricity through direct debit will face an average charge of 24.5p per unit, coupled with a daily standing charge of 60.99p. For gas, the average rate will be 6.24p per unit with a standing charge of 31.66p daily. Ofgem attributes the price hike to escalating international energy market prices due to geopolitical tensions and extreme weather conditions. In addition to higher energy costs, the new Government’s decision to end winter fuel payments for pensioners not receiving pension credits or other benefits has left around 10 million pensioners without up to £300 in support this year.
As households brace for winter amidst rising energy expenses, a survey by fuel poverty charity National Energy Action (NEA) and YouGov reveals that 46% of British adults are contemplating rationing energy use to cope with escalating costs. NEA chief executive Adam Scorer expressed concerns over millions of households facing a challenging winter, either accumulating energy debt or enduring cold homes due to inadequate support. Despite the current price cap surge, experts foresee a 1% decrease in January’s cap, with further reductions anticipated in the subsequent quarters.
Encouraging consumers to explore better energy deals, Ofgem Chief Executive Jonathan Brearley advises considering fixed-rate tariffs that could potentially offer savings. Organizations like Citizens Advice are particularly worried about vulnerable households, including those with children and low incomes, struggling to cover heating costs amid the price hike. Comparison site Uswitch.com highlights the impact of the price hike, projecting that households on an SVT could see their October energy spending rise to £135 compared to £55 in September, attributed to higher rates and increased autumn energy usage.
Households are encouraged to proactively seek more cost-effective energy tariffs in light of the present price surge, with the hope of securing lower rates before the onset of winter. The collaborative efforts of regulatory bodies, Government, suppliers, charities, and consumer groups aim to assist customers amidst the challenging energy landscape. Despite the current financial strain, experts suggest that switching to fixed-rate tariffs could offer relief, with the emphasis on consumer empowerment in navigating the fluctuating energy market.