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National energy prices have been rising, with little relief for bill payers through the rest of the year.
Ofgem’s second price cap increase this winter comes into force on Wednesday and means someone paying by direct debit and using a typical amount of gas and electricity will pay £1,738 a year.
This is £21 more per year than under the previous cap, so bill payers are urged to submit a meter reading to avoid overpaying on estimated usage.
Bills are about 50% higher than pre-Covid levels, and analysts predict they will rise another 3% in April.
Regulator Ofgem, which sets the cap covering 26 million homes in England, Wales and Scotland, has urged people to shop around for the best deal.
The best fixed price deals are cheaper than price cap based rates.
While these offers provide certainty, anyone signing up for them risks missing out if prices drop before the fixed element expires.
Due to rising wholesale prices, analysts at energy consultancy Cornwall Insight predict a further rise in the price cap in April of almost 3%. He expects prices to fall in July, then rise again in October.
Prices jumped in 2022 when the conflict between Russia and Ukraine broke out.
Analysts and regulators admit that prices and the global situation remain volatile and difficult to predict.
“As we look to the future, consumers need to prepare for continued fluctuations,” said Craig Lowrey, principal consultant at Cornwall Insight.
Many households will be concerned about an increase in energy prices of even 1% at the coldest time of the year.
Campaigners are calling for an insulation scheme to help those in the most difficult financial situations reduce their bills.
“We need long-term solutions,” said Caroline Simpson of Warm This Winter, which represents 40 charities.
The cap affects those in default, at variable rates, and is set every three months by Ofgem.
The regulator illustrates the change by showing the impact on the annual bill of a household with typical energy consumption – which equates to £1.75 more per month compared to the previous cap.
To estimate the effect on an individual’s annual costs, payers can add 1.2% to their current bill.
The cap is down 10% compared to the same period last year, but Ofgem said many bill payers would still be strained.
Millions of pensioners are no longer receiving the Winter Fuel Payment to help them pay their bills because it is now means tested.
Shaun Toussaint says you can shop even without internet access
Energy companies are urging those without a smart meter to submit an accurate reading immediately.
“If you stay out later, some of your December energy use could end up being estimated and therefore charged at the higher January rates,” said Elise Melville, of price comparison site Uswitch.
While the cost of each unit of gas and electricity is capped, the total bill is not. So a long, cold winter could lead to higher energy consumption and high bills.
Experts say the most important long-term options for reducing bills include shopping around or reducing energy use when possible.
At the Grange Community Centre, Blackpool, experts are available to offer advice to visitors, including assistant Shaun Toussaint.
“I always tell people that as long as they are proficient online, they should go and see what different prices are available,” he said.
“If you’re not competent online, they can get on the phone and call their existing supplier or another supplier and compare prices.”
Ellen Ryan is a community support worker
A period of high prices means households have collectively accumulated £3.8 billion of debt to their suppliers.
The average household in arrears owes more than £1,500 for electricity and £1,300 for gas.
Community support worker Ellen Ryan said anyone struggling should seek help.
“My best advice is to come find your local community center, whether it’s a library or a center, and get involved there. It will help you reduce your bills at home,” she said. -she declared.
The latest price change means:
Gas prices are capped at an average of 6.34p per kilowatt hour (kWh) and electricity at 24.86p per kWh – up from 6.24p and 24.5p respectively. A typical household consumes 2,700 kWh of electricity per year and 11,500 kWh of gas. Households using prepayment meters pay slightly less than those using direct debit, with a typical bill of £1,690. Those who pay their bills every three months by cash or check. pay more, with a typical bill of £1,851. Fixed charges – a fixed daily rate covering the costs of connecting to a network – fell very slightly to 60.97p/day for electricity and 31.65p/day for gas, compared to 60.99p and 31p .66 pence respectively, although they vary by region
Expert Tips for Reducing Bills
If your hot water is too hot for washing your hands, then your setting is too high, so turn the boiler down. Manage your drafts by placing a black bag with crumpled paper in an unused chimney, or try to limit other drafts in the house. Limit shower time to four minutes. The charity WaterAid has compiled a playlist of four-minute songs to keep you in the loop. Consider using a steamer rather than having separate pots of potatoes and vegetables on separate gas hobs. Use LED bulbs in lamps.
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