The energy bill will increase by nearly £ 100 from TOMORROW

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Energy bills will increase by nearly £ 100 from TOMORROW as 15 million standard tariff households will have to pay an average of £ 1,138 a year after Ofgem allowed suppliers to pass on the rising costs of gas and electricity to customers

  • Ofgem says the price cap for 11 million standard-rate homes could increase by £ 96 to £ 1,138
  • An additional 4 million households with prepayment meters could see £ 87 rise to £ 1,156
  • Consumers were urged to shop around for the cheapest deal after the announcement

Energy bills will rise by nearly £ 100 for 15 million households starting tomorrow, after Ofgem said suppliers could pass on the costs of rising gas and electricity prices to consumers.

The regulator announced in February that its price cap for the 11 million UK households on their supplier’s standard rate could increase by £ 96 to £ 1,138 from April 1.

Another four million households with prepayment meters could see their bills rise by £ 87 to £ 1,156.

Consumers have been urged to shop around for the cheapest deal since the increase’s announcement.

Ofgem’s decision followed an additional £ 23 increase that energy suppliers could charge customers for bad debts.

During the pandemic, businesses struggled to get some households to pay their bills, so Ofgem decided it should allow suppliers to spread those costs across the UK.

Energy regulator Ofcom said its price cap on 11 million homes in Britain on their supplier's standard rate could increase by £ 96 to £ 1,138 from tomorrow.

Energy regulator Ofcom said its price cap on 11 million homes in Britain on their supplier’s standard rate could increase by £ 96 to £ 1,138 from tomorrow.

This Ofgem chart shows the average prices in the last quarter for each of the large and medium suppliers to customers on credit payment methods.  These include standard rates from suppliers and cheapest rates, which are compared to the average price of the cheapest market rate and the standard rate cap in the period between October and December 2020.

This Ofgem chart shows the average prices in the last quarter for each of the large and medium suppliers to customers on credit payment methods.  These include standard rates from suppliers and cheapest rates, which are compared to the average price of the cheapest market rate and the standard rate cap in the period between October and December 2020.

This Ofgem chart shows the average prices in the last quarter for each of the large and medium suppliers to customers on credit payment methods. These include standard rates from suppliers and cheapest rates, which are compared to the average price of the cheapest market rate and the standard rate cap in the period between October and December 2020.

AVERAGE TARIFF PRICES PER SUPPLIER FOR UK ENERGY CONSUMERS
Supplier Annual average standard standard rate of the supplier The average annual standard variable rate of the supplier The cheapest average annual rate of the supplier Market cheapest average annual rate Standard rate cap
British Gas 1041 1041 825 1042
E.ON 1042 884 825 1042
EDF 1042 989 825 1042
Scottish power 1042 923 825 1042
npower 1042 1042 885 825 1042
Shell 936 1042 895 825 1042
THIS ONE 1042 981 825 1042
Utility warehouse 1037 955 825 1042
Green 1022 884 825 1042
Lamp 958 958 825 1042
Euro 997 871 825 1042
Octopus 966 964 926 825 1042
Standard variable and fixed standard versus cheapest available rates (GB) according to Ofgem

What do the changes mean for consumers?

Ofgem said the price cap for the 11 million UK households on their supplier’s standard tariff could increase by £ 96 to £ 1,138 from April 1.

Another four million households with prepayment meters could see their bills rise by £ 87 to £ 1,156.

In addition to an additional £ 23 increase, energy suppliers may charge customers.

The price ceiling is a ceiling for a unit of gas and electricity, taking fixed charges into account. It is not a ceiling on the total energy bill, which will still rise or fall in line with energy consumption.

The £ 1,138 per annum ceiling level is based on a normal consumption household based on a dual electricity and gas bill paid by direct debit.

Customers who are struggling to pay may be eligible for arrangements such as payment interruptions or suspension of credit meter disconnection.

The latest increase more than offset consumer gains in October, as the price cap fell by £ 84 to a record low since the policy was introduced in January 2019.

When the increase was announced, Jonathan Brearley, CEO of Ofgem, said: “Increases in the energy bill are never welcome, especially as many households are grappling with the effects of the pandemic.

‘We have carefully scrutinized these changes to ensure that customers are only paying a fair price for their energy.

“The price cap provides a safety net against bad pricing practices and saves customers up to £ 100 a year, but if they want to avoid the April hike they should look for a cheaper deal.”

Ofgem assesses and changes the tariff ceiling once every six months.

Speaking to the BBC in February, Mr Brearley said it would be better to change something now as the country enters summer, a time when energy consumption is lower, than in October, before winter.

However, Alistair Cromwell, acting CEO of Citizens Advice, called the increase “ a heavy blow to many households, ” saying it would be because the benefits would also be reduced for many.

‘For many people with Universal Credit, it will come at the same time as the £ 20 per week increase in benefits will end,’ he added.

“With a tough job market and the rising of the essential bills, now is not the time for the government to cut this vital lifeline.”

He added: “With the rise in the energy price cap, many will have to pay more and rightly expect decent service. Suppliers have to go the extra mile to give their customers what they deserve.

‘Everyone has to consider whether they are getting value for money from their supplier – paying more doesn’t always mean you get better service.

Don’t accept it if it’s not good enough. Have a look around if you can. ‘

A graph from Ofgem showing how wholesale gas prices for the relevant contracts offered in each observation window result in a fee that reflects the average cost of suppliers

A graph from Ofgem showing how wholesale gas prices for the relevant contracts offered in each observation window result in a fee that reflects the average cost of suppliers

A graph from Ofgem showing how the wholesale gas prices for the relevant contracts offered in each observation window result in a fee that reflects the average cost of suppliers

Another Ofgem chart shows the weighted average price of relevant electricity contracts

Another Ofgem chart shows the weighted average price of relevant electricity contracts

Another Ofgem chart shows the weighted average price of relevant electricity contracts

Emma Pinchbeck – CEO of Energy UK, a trade association for energy suppliers – said the price cap has been set to be fair to customers and businesses alike.

She added: “Today’s rise reflects that the cost of purchasing energy – by far the largest part of the bill – has risen significantly in recent months.

“It also includes a larger debt deduction, given the difficulties many customers currently face paying bills.”

It is because the unemployment rate in January was 1.7 million and 4.7 million people are on leave.

Ofgem assesses and changes the tariff ceiling once every six months.

The £ 1,138 annual ceiling is calculated based on the usage of an average household. Energy providers must prices below that limit, with most prices only a few pounds lower.

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