(qlmbusinessnews.com Wed. 2nd Oct, 2024) London, UK —
UK Energy Prices Increase: Key Steps to Save on Your Gas and Electricity Bills
Billpayers across England, Wales, and Scotland are being encouraged to provide accurate meter readings as gas and electricity prices rise once again. A typical household will see their annual energy bill increase by approximately £149, bringing the total to £1,717 per year.
Experts advise that submitting a meter reading will prevent customers from being charged based on estimated usage at higher rates. This adjustment comes at a time when many low-income households face rising costs without the benefit of additional cost-of-living payments. Around 10 million pensioners will also be affected by the withdrawal of winter fuel payments.
Energy Price Cap Changes
The energy price cap, which governs prices for around 27 million homes in the UK, is reviewed every three months by the energy regulator, Ofgem. While prices fell earlier in the year, they have now risen by about £12 per month for a typical user as of October.
The final impact on bills will vary depending on energy consumption, but experts recommend adding around 10% to current bills to estimate the increase. Uswitch, a price comparison website, advises submitting meter readings to avoid being charged for estimated usage at the new, higher rate. Customers with smart meters will have their readings taken automatically.
Standing charges have also risen by one penny a day for both gas and electricity. Ofgem is considering reforms to the system, while in Northern Ireland, regulated suppliers will not see any price changes in October.
The price cap primarily affects those on default variable tariffs rather than customers who have fixed their rates. Although energy costs are lower than last winter, many households are expected to struggle with the increase. Charity organisations warn that energy debt is rising, with nearly £3.7 billion collectively owed by UK households.
Rising Debt and Financial Struggles
Steve Vaid, CEO of the Money Advice Trust, which runs National Debtline, emphasised the need for urgent action to support households facing unmanageable arrears. Without such support, he warned that energy debt will only continue to grow.
James McMahon, from Blackburn, acknowledged being slightly behind on his gas bill, describing the situation as disheartening but unavoidable. “It's a disappointment. You feel it inside. It's just that bit too much with everything else we're facing,” he said.
For many households, financial support has dwindled, with the last cost-of-living payment made to eight million people on means-tested benefits in February. Pensioners will also see less help, with the winter fuel payment now restricted to those on low incomes.
In Scotland and Northern Ireland, the devolved governments have confirmed they will no longer offer universal winter fuel payments to pensioners, a decision that has raised concerns from charities and MPs.
Future Energy Bill Forecasts
Despite the current price hike, there is some hope on the horizon. Energy analysts at Cornwall Insight predict a slight 1% decrease in energy prices from January, which could bring the average annual bill down to £1,697 for a typical household.
Energy companies, through an initiative run over the past four years, have identified vulnerable customers, providing £500 million in additional support to those most in need.
The latest price adjustments mean the following for UK households:
– Gas prices are now capped at 6.24p per kilowatt-hour (kWh), up from 5.48p
– Electricity is capped at 24.5p per kWh, up from 22.36p
– A typical household uses 2,700 kWh of electricity and 11,500 kWh of gas annually
– Prepayment meter users pay slightly less, with an average annual bill of £1,669
– Households paying by cash or cheque face higher bills, with an average of £1,829
– Standing charges have increased to 61p per day for electricity and 32p for gas
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