Britons are being reminded to take action before energy bills rise for millions of households in a couple of days.
Ofgem’s energy price cap will rise by £94 a year, based on typical use for households on dual fuel paying by direct debit, in the New Year.
Families are being urged to take a reading of their home’s energy meter before the regulator’s price cap rises.
This is because an updated meter reading could help stop a household’s energy supplier from estimating bill prices which are not accurate to a home’s usage.
Energy bills will rise for millions in a couple of days
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If a home’s meter reading is lower than the supplier’s estimate, households can ask their energy provider to take action.
Suppliers could then lower their customer’s monthly direct debit to a more suitable amount to reflect the meter reading.
The energy cap will jump from £1,834 to £1,928 a year for households of average usage, although people could pay more than this, such as if they use more energy.
Through the cap, Ofgem sets a limit on the maximum amount energy suppliers can charge homes for each unit of gas and electricity, and the standing charge.
It is not a cap on how much someone can be charged for the energy that they use.
If someone uses more energy than usual, they will have to pay their energy provider more money.
A typical household on the price cap that pays their energy bills via direct debit currently pays the following rates:
- 6.89p per kWh for gas
- 27.35p per kWh for electricity
- A standing charge of 53.37p per day for electricity
- A standing charge of 29.62p per day for gas.
However, the same household will be on these rates from January 1 once Ofgem changes the price cap:
- 7.42p per kWh for gas
- 28.62p per kWh for electricity
- A standing charge of 29.60p per day for gas
- A standing charge of 53.35p per day for electricity.
The rates for prepayment meter customers are slightly different with the average household currently paying:
- 6.67p per kWh for gas
- 26.92p per kWh for electricity
- A standing charge of 34.20p per day for gas
- A standing charge of 55.52p per day for electricity.
From the beginning of the New Year, prepayment meter customers will start to pay based on the following rates:
- 7.24p per kWh for gas
- 28.17p per kWh for electricity
- A standing charge of 33.32p per day for gas
- A standing charge of 55.53p per day for electricity.
