Energy prices rising with warnings of more suffering to come

Household energy prices have risen and bill payers are expected to get some relief during the rest of the year.

The second increase in Ofgem’s price caps this winter comes into effect from Wednesday and means someone paying by direct debit and using the usual amount of gas and electricity will have to pay £1,738 a year.

This is £21 more per year than the previous limit, so billers are being urged to submit meter readings to avoid overpaying on estimated usage.

Bills are about 50% higher than pre-COVID levels, and analysts expect them to rise another 3% in April.

The regulator, Ofgem, which sets the limits covering 26 million households in England, Wales and Scotland, has urged people to shop around for the best deal.

The best fixed-price deals are cheaper than tariffs depending on the price range.

Although these deals provide certainty, signing up for one of these carries the risk of prices falling before the fixed element expires.

Due to rising wholesale prices, analysts at energy consultancy Cornwall Insight estimate the price range will rise by an additional 3% in April. He estimates that prices will fall in July and rise again in October.

Prices surged in 2022 when conflict broke out between Russia and Ukraine.

Analysts and regulators acknowledge that prices and conditions globally are still volatile and difficult to predict.

“As we look ahead, consumers should be prepared for continued volatility,” said Craig Lowrey, principal consultant at Cornwall Insight.

Many households will be concerned about an increase in energy prices of just 1%, at the coldest time of the year.

Campaigners are calling for an insulation program to help people in the toughest financial circumstances reduce their bills.

“We need long-term solutions,” said Caroline Simpson of Warm This Winter, which speaks for 40 charities.

This limit affects those on the default, variable tariff, and is set by Ofgem every three months.

The regulator reflects the changes by showing the impact on the annual bill of a household with typical energy use – which amounts to an extra £1.75 per month compared to the previous limit.

To estimate the impact on an individual’s annual costs, bill payers can add 1.2% to their current bill.

The limit is 10% lower than the same period last year, but Ofgem has said many bill payers will still go ahead.

millions of pensioners Will no longer receive winter fuel payments To help with bills, as it is now means-tested.

Energy companies are urging those who do not have a smart meter to submit accurate readings immediately.

“If you leave it on after this, some of your December energy use may be overestimated and therefore charged under the higher January rates,” said Alice Melville of price comparison website Uswitch.

While the cost of each unit of gas and electricity is capped, the total bill is not. Therefore, long, cold winters may see higher energy usage and higher bills.

Experts say more important long-term options for reducing bills include shopping around or reducing energy use whenever possible.

At The Grange Community Center in Blackpool, experts including support worker Shaun Toussaint are on hand to guide visitors.

“I would always tell people to go online as long as they’re able and see what different prices are available,” he said.

“If you’re not able to go online they can phone up and call your existing provider or another provider and compare prices.”

The period of high prices means households have collectively racked up £3.8bn of debt to suppliers.

The average household with arrears owes more than £1,500 for electricity and £1,300 for gas.

Community support worker Ellen Ryan said anyone struggling should seek help.

“My top tip is to get out and find your local community centre, whether it’s a library or a center and get involved there. This will help you keep your bills down at home,” she said.

The latest changes in prices mean:

• Gas prices averaged 6.34p per kilowatt hour (kWh) and electricity prices were set at 24.86p per kWh, up from 6.24p and 24.5p respectively. A typical household uses 2,700 kWh of electricity and 11,500 kWh of gas per year
• Households with pre-payment meters are paying slightly less than those with direct debit, with the typical bill being £1,690.
• People who pay their bills by cash or check every three months are paying more, with the typical bill coming in at £1,851
• The standing charge – a fixed daily charge covering the cost of connecting to the supply – has fallen slightly to 60.97p per day for electricity and 31.65p for gas, compared with 60.99p and 31.66p respectively. Although they vary by region

• If your hot water is too hot to wash your hands, your setting is too high so turn the boiler off
• Manage your drafts by placing a black bag with paper over an unused chimney, or try to limit other drafts around the house.
• Limit shower time to four minutes. The charity WaterAid has compiled a playlist of four minute songs to keep you on time
• Consider using a steamer instead of placing separate pans of potatoes and vegetables on separate gas hobs.
• Use LED lightbulbs in lamps