Bills are soaring across the UK, despite the cap
(Picture: Jacob King/PA Wire)Millions of households will see their energy bills rise from Saturday, October 1, when the new Energy Price Guarantee comes into effect.
Rising costs will be cushioned by a Government cap on the price per unit, but a typical annual bill is still expected to reach £2,500.
The price rise has been caused by an increase in wholesale gas prices (the amount that energy firms pay), which have seen a steep rise since October 2021. Gas prices have hit a record high, as the world emerges from lockdown as well time as other economic factors, such as the war in Ukraine having an impact.
So what does it all mean, and how will you be affected?
Energy price cap — you may pay more than £2,500
A price cap is a somewhat misleading term.
The actual amount of people’s bills depends on the amount of energy used. In fact, the cap refers to the cost per kilowatt hour (kWh) for gas and electricity, which has been set at 10.30p per kWh for gas and 34p per kWh for electricity.
The £2,500 figure refers to an average family using 12,000 kWh a year paying by direct debit – if you use more, you will pay more. People on pre-payment meters, or who pay after receiving a bill, will pay more.
When will I receive the £400 energy rebate?
Former chancellor Rishi Sunak introduced a £400 discount for energy bills, called the Energy Bills Support Scheme, which is due to start in October.
You do not have to contact your supplier about this. The discount will be made automatically by energy suppliers in England, Scotland, and Wales.
It will be spread over six months, with a reduction of £66 in October and November, and £67 every month between December and March 2023.
How you will receive the money depends on how you pay for your gas and electricity.
If you’re paying by direct debit, you will receive the discount automatically, as a deduction to the monthly amount you pay, or as a refund directly into your bank account once the monthly direct debit has been taken.
If you’re a pre-payment meter customer, you will be given redeemable discount vouchers or Special Action Messages (SAMs) in the first week of each month. You will receive them via text, email, or post and they can then be redeemed at your usual top-up point.
If you pay for gas and electricity separately, your rebate will be issued via your electricity provider.
Pensioners are also entitled to a £350 winter-fuel allowance. Those on disability benefits are being given £150. And low-income families on benefits have received £326 so far, with another payment due.
Why is it important to take a meter reading?
Submitting accurate meter readings means providers won’t accidentally charge you at the higher rate for your earlier energy use.
If you don’t do a reading, the energy firm will most likely make a best guess as to what your usage was before October 1 and what proportion after that date, and then bill you using those estimates. There’s a risk your previous usage could be billed using the higher unit rate.
Friday, September 30, the last day of the month, is being called “meter-reading day” to encourage bill payers to submit meter readings.
Energy UK, representing suppliers, said most firms will accept readings for a few days either side of October 1.
What if I can’t afford my energy bill?
If you’re worried that you might not be able to pay your bill, it’s important to contact your supplier.
If you are in debt to your energy company, you might be able to get a grant to help pay it off. British Gas, Octopus, and Scottish Power are among the firms which offer grants to their customers and charity Citizens’ Advice offers more guidance.
Organisations such as National Debtline also offer advice, and can help you check that your bills are correct and complain about your supplier if they are not.
If you do get into debt, Citizens’ Advice warns that suppliers have the right to force you onto a prepayment meter, which is the more expensive way of paying. The charity predicts almost half-a-million people could be in this position over the winter.
