Households Urged to Check Energy Bills Before Price Cap Update

Millions of households in the UK are being urged to review their energy bills in light of a forecasted increase in energy prices. Ofgem is set to confirm a new price cap on October 1, 2023, with predictions indicating a rise of approximately one percent, bringing annual costs to around £1,737. This change will directly affect over 22 million households currently on standard variable tariffs.

The energy price cap, which is reviewed every three months, sets maximum rates per kilowatt-hour (kWh) for gas and electricity, but does not limit total bills. Many consumers may find their actual bills exceed the headline figure, prompting experts to recommend switching to fixed-rate energy deals. By opting for a fixed deal, households can lock in stable rates for a set term, providing protection against future price fluctuations.

According to analysts at Cornwall Insight, the current average annual energy cost is £1,720. The anticipated increase to £1,737 could lead many households to miss out on potential savings if they do not act quickly. Uswitch reports that households switching to fixed-rate deals could save an average of £255 annually compared to the current cap.

Potential Savings and Current Offers

Ben Gallizzi from Uswitch emphasized the urgency for those on standard tariffs to consider fixed deals before the cap adjustment. He stated, “Anyone still on a standard variable tariff will be paying over the odds to keep their home warm as winter starts to bite.” He added that the current offers from energy suppliers present some of the strongest savings seen in months.

The cheapest fixed option currently available is offered by Outfox Energy, with its 12-month Fix’d Dual Aug25 12M v4.0 tariff costing a typical household £1,463 per year. This represents a saving of £257 compared to the current cap and £274 against Cornwall Insight’s predicted cap for October. Additionally, a two-year fixed deal from the same company costs £1,465, also providing substantial savings.

While fixed energy deals offer financial stability, they do carry risks. If energy prices drop, customers may end up paying more than they would have on a variable tariff. However, analysts suggest that significant drops in energy prices are unlikely in the near future.

How to Find the Best Fixed Rates

To secure the best fixed energy deals, consumers are encouraged to utilize price comparison websites, such as Uswitch.com and MoneySavingExpert’s Cheap Energy Club. By entering their postcode and energy usage details, households can receive customized lists of available deals. This process typically takes under five minutes.

Once consumers have a list of options, they should compare rates, contract lengths, and any additional benefits. It is also advisable to check directly with energy suppliers for exclusive deals that may not appear on comparison sites. Customer service reviews and supplier reputations should factor into the decision-making process.

For those experiencing financial difficulties, various assistance programs are available. Households in debt can approach their suppliers to negotiate repayment plans before considering a prepayment meter. Many energy companies, including British Gas and EDF, offer grants for customers struggling to pay their energy bills, with amounts reaching up to £2,000 in some cases.

Additionally, thousands of vulnerable households may be missing out on crucial support by not registering for the Priority Services Register (PSR). This service offers benefits such as advance notifications of blackouts and free gas safety checks to those who qualify.

Consumers are encouraged to reach out to their energy providers to explore available options and ensure they are receiving the best possible support during this period of rising costs.