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Exact amount energy bills set to rise this winter, experts predict
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MILLIONS of households could pay £146 more a year for their energy as bills are predicted to rise again in October.
The average household energy bill is set to rise by 9% when the latest change to the price cap takes effect, according to experts.
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Energy consultants Cornwall Insight said they expect the typical household's energy bill to rise from £1,568 a year to £1,714 a year on October 1.
This would be £209 less than the cap in October last year, when it was £1,923, but it is £146 higher than July 2024's cap.
The latest forecast is slightly higher than the £1,723 the group previously predicted for October.
The price cap changes every three months, so your bills could change again on January 1, 2025.
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Cornwall Insight said that it expects a "moderate" increase to the energy price cap again in January 2025.
But it added that more rises could be possible early in the new year due to “recent tensions in the Russia-Ukraine war”.
Ofgem will announce the energy price cap for October to December on August 23.
Dr Craig Lowrey, principal consultant at Cornwall Insight: "This is not the news households want to hear when moving into the colder months.
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"Following two consecutive falls in the cap, I’m sure many hoped we were on a steady path back to pre-crisis prices.
"However, the lingering impact of the energy crisis, has left us with a market that's still highly volatile and quick to react to any bad news on the supply front."
What is the energy price cap?
Ofgem changes the price cap every three months based on several factors, the most important of which is the price of energy on wholesale markets.
The price cap does not limit a household's total bills, people still pay for each unit of gas and electricity they use – the figures provided are just for an average-use household.
Richard Neudegg, director of regulation at Uswitch, said: "This prediction compounds the worry that energy bills are going to rise just as we reach the season to switch the heating back on.
“The price cap is expected to rise again in January, but bill payers can take action now to lock in certainty on how much they pay.
“There are a number of 12-month fixed deals available at rates cheaper than today’s firm prediction, so run a comparison to see what energy tariffs are available to you."
WHEN DOES THE PRICE CAP CHANGE?
OFGEM reviews the cap on unit rates for those on the default tariff every three months.
This means the energy price cap can move up or down at four different points in the year.
Price cap rates are updated on the following dates:
- January 1
- April 1
- July 1
- October 1
The level for the next energy price cap in July 1, 2024 will be confirmed on May 24.
How your payment methods affects your energy bill
For most, the cheapest way to pay your energy bills is via direct debit.
Currently, a typical household that pays their energy bill by direct debit pays the following rates:
- 5.48p per kilowatt hour (p/kWh) for gas
- 22.36p/kWh for electricity
- A standing charge of 31.41p per day for gas
- A standing charge of 60.12p per day for electricity
It means that a household with typical usage can expect to pay £1,568 a year.
This is based on the average household using 11,500kWh of gas and 2,700kWh of electricity every year.
However, those who pay on receipt of their bills can expect to pay £1,668.40 across the same period.
This is because these households will have to pay the following unit rates and standing charges:
- 5.77p per kilowatt hour (p/kWh) for gas
- 23.54p/kWh for electricity
- A standing charge of 35.24p per day for gas
- A standing charge of 65.93p per day for electricity
Households who pay for their energy through a prepayment meter are now charged the cheapest rates.
However, it's important to note that these households will always be at risk of disconnection if they can't afford to top-up their meters.
These customers currently pay the following rates:
- 5.26p per kilowatt hour (p/kWh) for gas
- 21.59p/kWh for electricity
- A standing charge of 31.41p per day for gas
- A standing charge of 60.12p per day for electricity
It means that a household with typical usage can expect to pay £1,521 a year - down from £1,644 a year.
Be aware that the exact unit rates and standing charges that you pay will also vary slightly based on your supplier and where you live.
To find out your specific rates, check your first gas and electricity bill received after July 1.
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If you're currently paying on receipt of your bill and wish to switch to paying by direct debit, reach out to your energy supplier.
It's worth login into your online account, as you can usually set up a direct debit there.
What energy bill help is available?
THERE'S a number of different ways to get help paying your energy bills if you're struggling to get by.
If you fall into debt, you can always approach your supplier to see if they can put you on a repayment plan before putting you on a prepayment meter.
This involves paying off what you owe in instalments over a set period.
If your supplier offers you a repayment plan you don't think you can afford, speak to them again to see if you can negotiate a better deal.
Several energy firms have grant schemes available to customers struggling to cover their bills.
But eligibility criteria varies depending on the supplier and the amount you can get depends on your financial circumstances.
For example, British Gas or Scottish Gas customers struggling to pay their energy bills can get grants worth up to £2,000.
British Gas also offers help via its British Gas Energy Trust and Individuals Family Fund.
You don't need to be a British Gas customer to apply for the second fund.
EDF, E.ON, Octopus Energy and Scottish Power all offer grants to struggling customers too.
Thousands of vulnerable households are missing out on extra help and protections by not signing up to the Priority Services Register (PSR).
The service helps support vulnerable households, such as those who are elderly or ill, and some of the perks include being given advance warning of blackouts, free gas safety checks and extra support if you're struggling.
Get in touch with your energy firm to see if you can apply.
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