Energy Price Hike to Affect Millions
Energy Bills Across UK Expected to Rise [How to Save Money]
Are Energy Bills Increasing?
We’ll cover exactly what is happening to energy bills, if they’re increasing and what you should do about it (if anything).
Ofgem announced that from 1st April 2021 the energy price cap (the maximum amount an energy company can charge you) is increasing to pre-pandemic levels.
The price-cap has increased from £1,042 to £1,138 per year. These numbers are based on a typical dual-fuel usage and the actual maximum will vary based on your circumstances such as property size, fuel mix and others.
This price-cap increase will affect approximately 7 million customers in the UK.
Will the price cap increase affect me?🤔
The price cap only affects customers who are on a default or standard-variable tariff. If you are on a fixed-term contract you won’t see any price increase in April, but you may see an increase once your fixed-term ends.
For those who are on standard-variable or default tariffs this would mean an increase of around £94 per year based on typical usage.
Which energy companies are increasing their prices? 💷
Most energy companies are in fact increasing the maximum in line with Ofgem’s new price cap. This includes companies across the big 5, such as British Gas, Npower, Ovo Energy, EDF and others such as Bulb Energy.
If you decide to stay on a standard tariff you will almost certainly be overpaying. Which pulled together this handy table which highlights just how more costly a standard variable tariff is. On average, a standard variable (default) tariff is around £100 more expensive than a comparable fixed-rate deal for the average household.
If you’re on a standard variable tariff or would like to see how much you could save on your energy bill, feel free to click below to compare the market and get a quote for your home ⚡️
How does the price cap work?
The price cap can be confusing if you take it at face value. The term price cap actually refers to the maximum amount you can be charged on a standard variable tariff. For the typical dual fuel customer (who takes gas and electricity and pays by direct debit) that is a maximum price of £1,138 per year.
Ofgem have created the below forecast which shows where your average bills goes and the maximum price.
What should I do next?
With all of this in mind, if you are on a standard variable tariff you should switch to a cheaper fixed-term contract. Whether you do this through SlothMove or another comparison site it’s important to do as it will save you £250 on average.
If you’re on a fixed rate deal you may also find it beneficial to see if you could save also.
In addition to reducing the amount you pay per unit of energy consumption you can also reduce your bills by wasting less energy. We have a full guide on how to save money on your energy you may wish to check-out.