Gas price crisis: everything you need to know – and how to save money NOW
THE UK energy crisis continues as prices soar and it's predicted that up to 60 providers could go bust - here's everything you need to know.
From what has happened to global gas prices to should you switch provider now, we answer all your questions.
What has happened to global gas prices?
They are up 250% since January – and 70% since last month.
It is due to increased demand after lockdowns, low supply from Russia, high demand in Asia, a fire affecting imported French electricity, and a lack of wind for wind turbines.
A long, cold winter also meant that UK stocks were at historically low levels.
Experts say prices will stay high this winter at least, but could drop in the spring.
What impact is this having on the UK energy market?
Five firms supplying 700,000 households have gone bust in the past six weeks: Hub, PfP, MoneyPlus, People's and Utility Point.
Bulb, which has 1.7m customers, has asked for a Government bail-out.
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It is predicted that several other small suppliers could go under within weeks and in the worst case 60 could go under by the end of the year, which would leave only 10 suppliers in the UK market.
Small energy firm Green has become the latest provider to be reported as being on the brink. If it fails it will leave 250,000 customers without a supplier.
Some comparison websites have stopped offering switching services due to the lack of offers.
What does this mean for bills?
Changes in wholesale prices are passed on to households through rising energy bills.
Wholesale gas accounts for around half of your energy bill, with the rest made up of operating, admin and policy costs and VAT.
Bills are at record levels and will stay high, probably until at least October 2022.
The energy price cap goes up to £1,277 at the end of September but that doesn’t factor in the latest wholesale gas price increases.
People switching will also have fewer companies to choose from, and many discounted tariffs are being scrapped.
The last fixed tariff that was below the energy price cap has now been pulled. The average fixed tariff currently available is now around £1,500.
Wait, what's the energy price cap?
The energy price cap is what you pay if you're on a default energy tariff, whether you pay by direct debit, standard credit or a prepayment meter.
It won't apply to you if you're on a fixed-term energy tariff or have a variable green energy tariff.
These default energy tariffs - also known as standard tariffs - are usually the most expensive.
Could the energy price cap be raised again?
Another price cap increase in April 2022 is expected.
Some 15 million households on standard tariffs will already see bills leap from October 1, when the energy price cap jumps by £139 to £1,277 a year.
But once the latest wholesale price rises are factored in, it could go up by another £300 when it rises next time.
The government has said it doesn't want to raise the cap outside of its expected reviews.
What is the Government doing about it?
The Government says bills would be £100 higher without the price cap.
It is holding crisis talks with the industry to try and find a solution.
Business Secretary Kwasi Kwarteng has warned families will face the choice between eating and heating this winter.
Mr Kwarteng insisted there's "absolutely no question of the lights going out" and that Britain has a reliable supply of gas.
But he admitted there is little the Government can do about rising wholesale prices.
He has said that options being considered include giving firms loans to help bail them out of trouble.
What should I do now?
It's worth checking which supplier you're with and what tariff you're on so you know how much you are paying.
If you're on a fixed tariff, make a note of when it ends and set a diary reminder for a month before to compare prices then.
If you're on a fixed deal, your bills won't go up.
If you're on a variable tariff then you will see your bills rise at the end of the month.
You can use a comparison service like one from Which? or MoneySavingExpert which will show you the whole energy market to see if there is a cheaper tariff.
Martin Lewis says that there are two options right now.
You can stick with the standard variable tariff, which is the one that is set by the energy price cap.
Or search for the cheapest fixed deal. But these are disappearing so it may not be possible to find one.
You should also check if you are getting all the financial support you need. We will include more information about that below.
Plus, it may help to review how to save money on your bills now.
What if I am in credit and my supplier goes bust?
Your credit protected. The balance is transferred to yoru new supplier, who will pay you any outstanding credit – minus energy you have used but not been billed for.
The same is also true for debt. If you owe your supplier money and it goes bust, this debt will be transferred to the new provider and you’ll still have to pay.
Will I lose my warm home discount if my supplier fails?
Maybe. A Warm Home Discount of £140 is given to those aged 62 or over, who are on certain benefits or low income.
If you are 62-plus and on pension credit and your energy provider goes bust, you still get the discount automatically.
But those in the broader group may no longer get the payment as the new provider appointed to you may not offer the discount.
In some instances, energy firms may agree to pay the discount even if they don’t usually offer it, but they don’t have to.
If you are switching providers, be sure to check if the new supplier offers the warm home discount. Also check that it has not closed applications, as there are limits on the numbers.
How can I get help with bills?
Firstly, if you're struggling to pay your bills then talk to your supplier.
They may have a scheme which can help support you if you're in financial difficulty.
Then you need to check if you can get help. This includes:
- Winter fuel payments
- Cold weather payments
- Warm home discount scheme
- Grants to clear debt from your energy supplier
How else can I save money on my energy bills?
Simple things like bleeding your radiators, turning down the thermostat and putting on extra layers before you turn the heating on are the first steps.
You can also improve the energy efficiency of your home with double glazing and insulation.
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Read our guide to saving money on your bills with simple, easy advice.
Finally, if you are worried about paying your energy bills organisations such as and may be able to help.
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