The Energy Price Cap is jumping again from July. But some households may still have time to swerve the worst of it.
Just when we thought energy bills might calm down, here comes another whack.
From 1 July, the Energy Price Cap is going up. A typical household paying monthly could see yearly costs rise from about £1,641 to £1,862. Prepayment customers will be hit too, with typical costs rising by around 13.5 per cent to about £1,812.
Ofgem says the jump is mainly down to higher gas prices. This means the price energy companies pay for gas has gone up, partly because of the conflict in the Middle East.
The change mainly affects households on a variable tariff deal, known as being on the Price Cap. If we are not on a fixed deal or special tariff, there is a good chance we will be affected. The deal may be called Standard Variable, Flexible, or Default. This is often the basic deal we move onto when a fixed tariff ends.
So before we all start shouting into the meter cupboard, it is worth checking one thing: “Am I on a fixed tariff or the standard variable tariff?” A recent bill, online account, app, or quick call to the supplier should tell us.
The July rise lands in summer, when most of us use less energy. But if prices stay high into autumn and winter, that is when things could really bite.
Should we fix now?
Martin Lewis says households on the Price Cap should check if they can move to a cheaper fixed deal before July.
A fixed deal means the price we pay for each unit of gas and electricity is locked in for a set time, often 12 months. That can help if prices rise again. But if we pick the wrong deal, we could end up paying more than we need to.
MoneySavingExpert says some fixes have been up to 4 per cent cheaper than the current Cap. That could make them around 15 per cent cheaper than the July Cap. But deals change quickly, so this is not one to guess.
It may be worth checking fixed deals if we are on a standard tariff, our current fix is ending soon, or we want more certainty over bills.
We need to be more careful if we are already on a cheap fix, the new deal has high exit fees, we might move soon, or we are on a prepayment meter, where cheap fixes can be harder to find.
Before deciding, MoneySavingExpert’s fixing guide explains what to compare. Its Cheap Energy Club can also show deals based on our area and usage.
And if we do not have a smart meter, it is worth sending a meter reading before 1 July. That helps make sure we are not charged the new higher rates for energy used before the rise.
If bills are already a struggle, switching may not be the first thing to sort. The Quids in! Energy Saving page has more help on the Price Cap, fixed deals, keeping energy costs down, and useful numbers to call for support.
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