Energy prices set to rise by £149 per year this Autumn
From 1 October to 31 of December, the price for energy – electricity and gas – for a typical household paying direct debit will go up to £149 per year. This increase is 10% more than what we pay now averaging to around £12 more pounds a month.
While a rise in bills may cause concern this new energy price cap turns out to be £117 cheaper than the same period last year.
The price cap is set differently depending on how we pay. The numbers below are calculated using a typical household as reference. In the last quarter (1 July, to 30 September):
- Paid by Direct Debit: Price Cap rises from £1,568 – £1,717 a year
- Paid by cash, cheque, or quarterly Direct Debit: Price Cap rises from £1,688 to £1,829 a year
- Prepaid: Price Cap rises from £1,522 to £1,669
The cap was introduced by energy supplier Ofgem back in 2019 to make sure customers who don’t switch energy suppliers still get a ‘fair price.’
Every three months Ofgem reviews and sets a cap for how much an energy supplier can charge for each unit of energy. This cap applied to homes across England, Wales and Scotland.
The price cap applies to us if we are on a standard or default energy tariff (the majority of us). We will be on a price-capped tariff if:
- We never switched energy tariff
- Our fixed deal period ends
- Our supplier goes out of business
- We’re moving homes
If we are unsure what tariff we are on, our energy provider will let us know.
The energy cap does not limit how much we spend in total.
Remember, the cap applies to energy rates, not our bills. A cap on our bills would mean no matter how much energy we use, our bills cannot exceed a certain level. But a cap on the energy rate means that per unit of energy, our supplier cannot charge above a certain amount.
While prices will be lower than this time last year, less support is available. The last cost-of-living payments were made in February and Winter Fuel Payments are now means tested across England, Wales, and Scotland. Rather than be available to all pensioners, the payments will only be available to those of us claiming Pension Credit.
Quids in! has advice on help and support available if we’re affected.
Image: Alex Yeung / Shutterstock
