The price cap on energy bills looks set to rise by an extra £1,000 at the beginning of October, according to a new prediction from Cornwall Insight. The latest data from the energy analysts suggests a rise of 51% on the current price cap of £1,971 to around £2,980.63 for the next period, which runs between October and December - previous estimates had put the next price cap at £2,800.
Millions of households across the country are seeing their budgets stretched to the max as they try to combat the cost of living crisis. However, many may not be aware they might be able to bring their next direct debit down, especially if they have been making energy-saving cuts around the home recently
The information came to light on Monday in a written response by Energy Minister, Greg Hands MP to a query from Labour MP, Dan Jarvis. And it could be a game-changer for many.
Mr Jarvis asked: “What steps his Department is taking to support people whose direct debit for energy bills has been significantly increased by their energy provider without notice causing them to enter an unarranged overdraft?"
Mr Hands responded: “Suppliers must take all reasonable steps to ensure that customers’ direct debit payments are based on the best available information.
“A supplier should explain the reasons for changes made, with at least 10 days advance notice before the next payment is taken.”
He added: “The customer may challenge a proposed increase and renegotiate the payment level.”
Which means, if you submit a meter reading at least 14 days before your next bill is due, when your supplier contacts you to confirm your next direct debit payment - at least 10 days before it’s scheduled to be taken - you can contact them and ask them to look again at the amount they want to take, especially if it’s higher than the previous month and you know your household has reduced its overall usage.
While this may not work for everyone, it’s a good way to start getting into the habit of submitting regular meter readings to ensure your supplier has an accurate picture of how much your household is using.
Ofgem announced this week that energy customers’ money is to be protected under new financial measures to ensure suppliers can withstand future shocks to the market.
The energy regulator has said suppliers will be able to “weather the ongoing storm” of challenges facing the industry, especially over autumn and winter. Proposals include better protecting consumer credit balances if a company goes into administration, ensuring suppliers have enough money during trying circumstances and allowing firms to have sufficient control over key assets.
Ofgem also announced that there will be a tightening on the level of direct debits suppliers can charge customers.
The energy regulator has said the changes will reduce the risk of suppliers going bust and protect the credit balances of energy customers if they do.
A safety net ensures customers are quickly moved to a new supplier with their credit balances intact if a supplier does collapse.
One of the experts at Cornwall Insight predicting the £1,000 rise in energy bills this autumn has said the UK Government has room to provide more support to billpayers.
Dr Craig Lowrey told BBC Breakfast on Tuesday: “We’ve had the initial raft of financial support to households in April, with the expectation of a £400 payment coming later in the year.
“Together those measures will make a dent in the increases that we’re forecasting, but obviously it won’t offset this.
“So there’s clearly the potential for further support to be sought from the UK Government for as long as these high prices continue, so we can’t rule additional measures out.”
Dr Lowrey and his colleagues believe that prices will remain above £2,600 until at least October next year.
Based on the latest data they predict the cap will reach £3,003 in January 2023 before dropping to £2,758 in April and £2,686 in July.
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