Energy price hike: Are YOUR energy bills going up? Why are energy prices increasing?

Energy price cap: OFGEM chief outlines rise in rate for customers

Energy bills can be one of the biggest monthly outlays in any household. And with millions of us now at home a lot more during the day, we’re all using a lot more electricity – from powring up our work computers to making every meal from scratch. Energy prices will rise for an estimated 15 million UK households from April, just as the coronavirus furlough scheme comes to an end, likely placing households under even greater strain.

Energy prices will increase for millions of British households in April after the regulator Ofgem announced the price cap for domestic energy deals would be raised.

The price hike is being driven by a need to cover suppliers’ additional costs.

The current price cap meant households were facing savings of £100 a year.

April 2021 will be the first time the energy price cap has been raised in two years.

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Ofgem announced an £84 a year cut in October 2020 in the wake of the first Covid-19 lockdown – the lowest level yet for the current winter period.

The typical gas and electricity customer is likely to see their bill rise by between £96 and £1,138 a year for 11 million default tariff customers.

Four million prepayment meter customers will see their energy prices rise by between £87 to £1,156 a year.

The regulator said consumers could potentially save up to £150 a year if they look at switching tariffs.

Jonathan Brearley, chief executive of the regulator, said the rise in spring would be more beneficial as less energy is used during this season.

He said: “Energy bill increases are never welcome, especially as many households are struggling with the impact of the pandemic.

“We have carefully scrutinised these changes to ensure that customers only pay a fair price for their energy.

“As the UK still faces challenges around Covid-19, during this exceptional time I expect suppliers to set their prices competitively, treat all customers fairly and ensure that any household in financial distress is given access to the support they need.”

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Demand for energy has recovered since the pandemic, which has subsequently prompted an uplift in prices to more normal levels.

Ofgem made its decision to allow suppliers to claim £23 back from the new default tariff price cap level to cover expected higher levels of customers being unable to pay their bills because of financial difficulties arising from the pandemic.

The regulator announced the move would ensure companies could continue to supply energy and protect their customers, especially those in vulnerable circumstances.

Mr Brearley added: “The government and Ofgem have been working with the energy industry and consumer groups to support customers through this difficult time and I urge anyone worried about paying their energy bills to contact their supplier and access the help available.”

Ofgem added suppliers are required to provide emergency credit to customers struggling to top-up prepayment meters.

The regulator reviews and changes the price cap once every six months.

Many people have taken to social media to share their concern about the price hike.

One person wrote: “Two and a half million people having trouble paying energy bills. Ofgem’s solution put the cost up in April so energy companies can recoup some of these losses and consumers can adjust to higher prices. Brilliant.”

Another tweeted: “I wonder how many more people will be pushed into fuel poverty. It’s not as though the energy companies aren’t making money. To raise prices at this time is a scandal.”

One social media user added: “If they raise the energy prices then all other utility companies will raise their prices, this is not good at all during this Pandemic. People will see Prices will rise in all their bills, even water.”

One person wrote: “So energy prices going up despite overall consumption still down due to pandemic. Petrol and diesel are up although oil is around $50 a barrel. Govt. green initiatives and taxes on the horizon. Looks like we will get out of one crisis into another.”

Another added: “Bills should not be going up. These companies earn enough profits already. #energyPrices”

Top tips to help reduce your energy bills:

  • Consider switching to another energy supplier
  • Cook your meals in batches and freeze them
  • Wait until you have a full load before doing a load of laundry
  • Air dry your clothes rather than using your tumble dryer
  • Choose energy-efficient machines when you have to replace appliances.
  • Bleed your radiators regularly to ensure your heating is working efficiently.

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