Gas and electricity bills for around 22 million households across Scotland and the rest of the UK will increase by £693 from April 1st.
The upcoming rise of 54 per cent means the average household energy bill will soar to an eye-watering £1,791 per year while homes on prepayment meters will see costs go up by £708 to £2,017 - and they are expected to go up again when Ofgem reviews the price cap in August, with the change coming into effect in October.
However, the team at MoneySavingExpert.com have shared a clever - and totally legal way - for those using a prepay meter to delay the price cap through a ‘loophole’ which will work for gas or electricity top-ups not using a smart meter.
They have also highlighted the urgent need for everyone to start taking regular meter readings, especially this month.
We’ve summarised the need-to-knows below and you can read the full details on the MoneysavingEdpert.com website here.
Prepayment meter loophole
Many people with older, non-smart prepayment meters, who are still using keys and cards to top up and on a price-capped tariff, can legally 'stockpile' gas and electricity credit before prices shoot up on April 1.
Money Saving Expert explained: “The rates won't change until the first time you top up following a price change, so any credit you've added before then will be charged at the old rates.
“If you have a smart prepayment meter, this won’t work as these meters are updated remotely with the new rates on the day of a price change.”
All you need to do is top up as much as you can afford up to the limits of the meter before April 1.
This will work for all energy suppliers, except Scottish Power - the full list is here.
Money Saving Expert also checked with Ofgem, who said this trick should work.
An Ofgem spokesperson said: "Smart prepayment meters update prices automatically - so topping up in advance would not make a difference. With non-smart prepayment meters, the price customers pay is fixed at the point they top-up.
"This means that any built up credit is spent based on the price of energy at which that credit was purchased. So a price increase could temporarily be avoided by building up credit in advance, though this would also work the other way if the price went down."
Start doing regular meter readings
The consumer website is urging everyone to do these on a regular basis, especially on March 31 - before the price hike kicks in.
It warns: “Don't rely on estimated use - unless you've a smart meter that does it for you, make sure your meter readings are up to date when the price cap changes on 1 April.
“This is to ensure you're not paying for more than you need to at the higher rate (as otherwise the firm will try to calculate what was used before and after).”
£150 Council Tax energy rebate update
Money Saving Expert is advising everyone in England and Wales to set up a Direct Debit now to ensure the money is transferred automatically to their bank account in April.
If you don't set one up, your local council will send you details on how to claim it.
Scottish councils will be able to decide whether to give households the £150 as a cash payment or credit off Council Tax bills - the full details haven’t been released yet.
The support will apply to those in council tax bands A to D, plus those eligible for Council Tax reductions, some 1.85 million Scots households will receive the support.
Households will be paid automatically - you do not need to apply.
The Scottish Government hasn’t provided a specific date for when the money will be distributed but said households will receive payments in April.
Energy tariffs - stick or switch?
Earlier this week, the founder of the consumer website, Martin Lewis, shared a 10-minute video on social media and YouTube sharing crucial updates on energy tariffs and whether customers should be locking into a fixed deal right now or still “do nothing”.
Martin explained: “Some of you might be lucky enough to still be on a cheap fix from before this all happened. If so, just stick with it for as long as you can, because energy prices have increased so much that you'll be paying way below what you'd be paying if you moved anywhere else.
“Even the idea of moving quickly to try and bag a bargain is just not worth it, so stick on your cheap fix for now."
He continued: "This brings me to the next issue, the big question, should you be looking into a fixed tariff right now?
“The rule of thumb is this; I would not switch to a fixed deal unless it was less than 75% more than the current price cap, or if you want to base it on the April price cap, no more than 15% more than the April price cap.
"So if you can find a fix within that price range then it is worth getting. But you will not find those prices on a comparison site. There are no open market options close to that price - they're all 40% more than the April price cap at the very cheapest.”
You can watch the full video on the MoneySavingExpert.com website here.
You can also sign up to the weekly MoneySavingExpert.com newsletter here.
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