Energy bills fall but due to rise in October

Household gas and electricity prices are set to fall from today (1 July).

It’s after energy regulator Ofgem set a new energy price cap for England, Wales and Scotland, limiting how much energy providers are allowed to charge for energy.

On average, a typical household’s energy bill will fall by £122 a year under the current price cap, bringing the average bill down to £1,568 a year.

This is the cheapest energy has been in two years, but a typical household’s energy bill is still £400 higher than three years ago.

Household debts to energy companies add up to a collective £3bn due to the unprecedented rise in energy bills seen over the last two years.

Your usage still matters

The price cap sets a limit on the maximum amount suppliers can charge for each unit of gas and electricity you use. It also sets a maximum daily standing charge, which is the base amount you pay just to be connected to the grid.

It’s important to bear in mind that the price cap doesn’t mean you can use more energy and not be charged over a certain amount. The more energy you use, the more you’ll pay.

Autumn rises

Despite the drop, experts predict bills will go up again in October.

As the weather gets colder and people start putting their heating on, households will inevitably consume more energy.

It’s expected that a typical household’s annual bill will be back up to £1,723 a year in October, which is a 10% increase from now.

Is your supplier pressuring you to move to prepayment?

Those on prepayment meters (PPM) tend to be under more financial pressure. Unfortunately, this means the summer’s price cap may not make a big difference for those households.

Energy companies often push people struggling with their bills to move to a PPM, or pay-as-you-go meter.

But research shows that those on PPMs have higher levels of emotional distress and are more likely to borrow from illegal moneylenders.

Find out what you can do if your suppliers is trying to push a PPM on you.

Do you need money advice?

If you’re struggling to keep up with your bills, we can help.

We give free and impartial advice, and can put together a budget to help you take control of your money.  

If you’re in arrears, we can advise you on debt solutions online or you can give us a ring. Some solutions are free, others have a fee.