Households in the UK have been advised to provide their energy meter readings promptly as a price hike goes into effect. Nearly 10 million households have been warned that failing to send meter readings to their supplier may lead to overpaying for energy, as a 10% price increase takes place.
As of Tuesday, the average household energy bill is set to surge by £149 annually, with Ofgem raising the price cap just as the colder winter months approach. The regulator has upped the cap from the existing £1,568 for a typical dual-fuel household in England, Scotland, and Wales to £1,717, equating to around £12 more per month on average bills. This new cap is 6% or £117 lower than the previous year’s figure for the same period.
Households on a standard variable tariff (SVT) without a smart meter are advised to submit their electricity and gas readings to their supplier promptly to ensure accurate billing based on actual usage before the price increase comes into effect. Estimated bills without meter readings may result in households either overpaying or underpaying.
The price cap determines the maximum charge per kilowatt hour (kWh) of energy consumed, but total bills are still influenced by the amount of energy used. Effective from October 1, households on SVTs paying for electricity via direct debit will face an average charge of 24.5p per unit with a daily standing charge of 60.99p. For gas, the average charge will be 6.24p per unit with a daily standing charge of 31.66p.
According to Ofgem, the decision to raise prices was driven by increasing costs in the international energy market due to heightened political tensions and extreme weather events. With the scrapping of winter fuel payments for pensioners not receiving pension credits or other benefits, around 10 million pensioners are set to miss out on payments of up to £300 this year.
As winter approaches, nearly half of British adults are considering rationing their energy use to cope with rising costs, as revealed in a survey by the National Energy Action (NEA) and YouGov. Chief executive of NEA, Adam Scorer, highlighted the challenges faced by households, expressing concern over the recurring cycle of rising prices and insufficient support.
While the current price cap is lower than during the peak of the energy crisis earlier in the year, there is hope for a 1% reduction in the cap in January, with further decreases anticipated in the following quarters. Ofgem’s chief executive has advised consumers to explore fixed-rate tariffs for potential savings and reassured ongoing support from the regulator in collaboration with various stakeholders.
Concerns have been raised by Citizens Advice regarding households with children, young people, and those on lower incomes, who may struggle with heating costs. Comparison site Uswitch.com noted that households on SVTs could see a significant increase in energy spending in October compared to September, attributed to higher rates and increased usage at the start of autumn.
Energy spokesperson at Uswitch, Elise Melville, suggested considering fixed energy tariffs as a cost-effective option amidst market uncertainties. With the energy landscape evolving, locking in lower rates before winter could present savings for consumers.