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The energy price cap will jump from £1,641 to £1,862 with effect from July 1, Ofgem has confirmed, due to higher wholesale gas prices driven by ongoing conflict in the Middle East.
The price cap, which was introduced by the energy regulator Ofgem in 2018, limits what a supplier can charge on their standard variable, or default, tariff. The cap is based on the price per kWh of electricity and gas that can be charged. It isn’t, however, a limit on total bills, as these depend on your usage, so those who live in large properties or who consume a large amount of energy could see annual bills much higher than £1,862, while those in smaller homes could pay less.
Ned Hammond, Energy UK’s Deputy Director, Policy, said: “A rise of this scale will already be a concern for millions of customers but such worries will be magnified if bills remain at this level – or higher – over the winter months. So the Government must now focus on how it can best target support later in the year to those customers most in need – in addition to the help suppliers already offer.
“It’s another unwelcome reminder – coming too soon after the last one – of how our country’s high dependence on gas leaves us exposed to price spikes we can do nothing about resulting from conflicts thousands of miles away.”
Many people are likely to be worried about energy prices rising again, especially with so many other living costs also going up. Find out more in our article The energy bills crisis: what can you do about soaring costs?
Here, we explain what support is available for those struggling to pay energy bills, and what you can do to keep costs down.
What help can I get with energy bills?
Those on low incomes may be entitled to some help with energy costs.
It’s vital to check whether you’re eligible for Pension Credit as soon as possible as it could not only provide you with valuable retirement income, but it may also help you qualify for these benefits, as well as the Winter Fuel Payment. You can find out if you qualify for Pension Credit and how much you can get using the Gov.uk Pension Credit calculator.
If you do qualify, you can make a Pension Credit claim by phone using the Pension Credit claim line on 0800 99 1234. If you’d rather make a paper application, you can request one on the above number, or you can download and print a Pension Claim form here. Find out everything you need to know about Pension Credit in our guide Pension Credit explained and about how the Winter Fuel Payment works in our article Winter Fuel Payment: who is eligible, and how can I claim?
If your home is badly insulated, you might be eligible for help to make improvements that will make it more energy efficient and keep you warmer. You can use the links below to find out more about schemes that may be available to you depending on where you live:
- England – The Simple Energy Advice website
- Scotland – Home Energy Scotland
- Northern Ireland – Energy Saving Grants in Northern Ireland
- Wales – Nest Scheme
You might also be eligible for a £150 discount off your energy bills under the Warm Home Discount scheme, if your supplier belongs to it and you are receiving the Guarantee Credit element of Pension Credit, or you’re on a low income and receive certain means-tested benefits.
To check which energy suppliers offer the discount, you can visit Gov.uk.
During periods of particularly cold weather, you may also qualify for Cold Weather Payments of £25 if you’re claiming certain benefits such as Pension Credit. These are made when your local temperature is recorded as (or forecast to be) an average of zero degrees celsius or below for at least seven consecutive days between 1 November and 31 March every year.
You should receive these payments automatically, so there’s no need to apply.
Find out more in our guide Are you eligible for help with heating costs?
How can I reduce my energy costs?
Making a few simple changes around your home could help reduce your energy bills.
For example, according to the Energy Saving Trust, you can save around £35 a year just by remembering to turn your appliances off standby mode, whilst cutting back your washing machine use by just one cycle per week can save you £8 a year on energy.
Similarly, hanging up your wet clothes to dry rather than using a tumble dryer is an easy way to reduce your energy consumption and could save you up to £70 per year, according to OVO Energy.
Kevin Mounford, personal finance expert and co-founder of Raisin UK, said: “Even small changes around the home can have a real impact on household energy bills. Devices left on standby, from phone chargers to gaming consoles, continue to drain power. I recommend unplugging non-essential appliances when they’re not in use, using energy-efficient LED bulbs, and running full loads rather than half loads in your washing machine and dishwasher to maximise efficiency.
“Keeping your fridge and freezer tidy can also help them run more efficiently, while sealing draughts and closing curtains at dusk prevents heat from escaping. All of these small actions combined could save households hundreds of pounds a year. With winter approaching and energy costs still high, now is the perfect time to adopt these simple habits and take control of your bills.”
Learn more in our article Energy saving tips: how to reduce your bills.
If you’re currently on your energy provider’s standard or default tariff, it’s worth checking whether you might be able to switch to a cheaper deal. Default tariffs are usually suppliers’ most expensive tariffs and energy customers should be able to save by switching to a cheaper fixed rate deal.
Sarah Pennells, Consumer Finance Specialist at Royal London said: “Our latest research shows that one in eight people have less than £50 left at the end of the month once they’ve paid their rent or mortgage, household bills, council tax and food. Finding this extra amount will be a struggle for many and perhaps impossible for some.
“This new cap price will also be disappointing for bill payers who are coming off a lower fixed rate tariff. However, there may be steps you can take to help manage your bills and reduce your energy usage. If you’re thinking of switching it’s worth checking price comparison sites regularly as deals are changing regularly. If you can’t save money by switching, then using energy as efficiently as possible and considering switching to direct debit if you pay your bill when it arrives could save you money.”
If you’re considering switching your energy provider, it’s worth doing plenty of research so you can be certain you’ve found the best possible deal to suit your needs. Comparison websites such as MoneySuperMarket, Uswitch and Compare the Market enable you to compare the latest energy tariffs, whether you’re looking for a fixed or variable deal.
What if I can’t pay my bills?
If you’re finding it impossible to cover your energy costs, get in touch with your supplier as soon as you can and explain that you’re having financial problems. They are obliged to give you advice on how to pay back the money you owe and should suggest a repayment plan that will still leave you enough money to live on. If you’re struggling with energy debt, your supplier might be able to offer a grant to help repay this. Find out more in our article Is your energy supplier offering grants to pay off energy debts?
Don’t worry that a missed energy bill will be followed by disconnection – it won’t.
You may be told by your energy provider that your gas and electricity supply could be disconnected if you haven’t paid a debt after 28 days of being notified. However, usually your supplier will offer a variety of options to repay your debt, rather than disconnect you, such as a repayment plan or prepayment meter.
Find out more in our guide What can you do if you can’t pay your energy bills?
Where to find advice
Working out how you’ll cover energy bills can feel overwhelming, and if you are struggling it’s a good idea to seek professional advice as soon as possible.
There are plenty of free sources of advice available and many charities and organisations can help you negotiate debt repayment plans with your creditors on your behalf. These include:
- Citizens Advice – 0800 144 8848 (England) 0800 702 2020 (Wales)
- StepChange – 0800 138 1111
- National Debtline – 0808 808 4000
- PayPlan – 0800 280 2816
Whatever happens, don’t suffer in silence, as struggling with debts on your own can take a real toll on your mental health. If you are finding it hard to cope, our article Are money worries affecting your mental health? explains where to go for help if you need someone to talk to.
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