ENERGY bills are set to rise by up to £96 a year for millions of households after Ofgem hikes the price cap.
The regulator has upped the maximum price suppliers can charge for electricity and gas from £1,042 a year to £1,138.
But households can save up to £150 a year by switching to a fixed-rate tariff.
The cap affects around 11million households on standard variable tariffs.
Around 4million households on prepayment meters will also see bills rise by £87, to £1,156.
The price hikes will see a return to its pre-pandemic levels and come into effect from April 1 2021.
How to save on your energy bills
SWITCHING energy providers can sound like a hassle – but fortunately it’s pretty straight forward to change supplier – and save lots of cash.
Shop around – If you’re on an SVT deal you are likely throwing away more than £300 a year. Use a comparion site such as MoneySuperMarket.com, uSwitch or EnergyHelpline.com to see what deals are available to you.
The cheapest deals are usually found online and are fixed deals – meaning you’ll pay a fixed amount usually for 12 months.
Switch – When you’ve found one, all you have to do is contact the new supplier.
It helps to have the following information – which you can find on your bill – to hand to give the new supplier.
- Your postcode
- Name of your existing supplier
- Name of your existing deal and how much you pay
- An up-to-date meter reading
It will then notify your current supplier and begin the switch.
It should take no longer than three weeks to complete the switch and your supply won’t be interrupted in that time.
The watchdog sets the price cap twice a year to limit how much suppliers can charge customers on SVR tariffs, depending on wholesale prices.
Ofgem says it saves these households between £75 and £100 a year, but customers can cut bills even further by switching deals.
Alistair Cromwell, acting chief executive of Citizens Advice, said the price hikes will come as a “heavy blow” to households who are also facing a £20 a week cut in Universal Credit payments.
Around 3.7million households are living in fuel poverty, according to The End Fuel Poverty Coalition, with a further 2.1million behind on their bills.
Jonathan Brearley, chief executive of Ofgem, accepted that the price rise will be challenging for some customers who may be struggling with the impact of the pandemic.
He said: “As the UK still faces challenges around COVID-19, during this exceptional time I expect suppliers to set their prices competitively, treat all customers fairly and ensure that any household in financial distress is given access to the support they need.”
It comes just days after the watchdog agreed to allow providers to charge households an extra £23.69 a year to help cover coronavirus related debts.
The Adjustment Allowance was introduced in 2020 as a one-off coronavirus measure so suppliers could support households through the pandemic.
AISLE BE DAMNED
Shoppers pay £320 a year EXTRA by shopping at smaller supermarkets
It increased the cap by £15 a year last summer but the watchdog decided to hike the allowance again, adding even more onto bills.
The idea is to help suppliers claw back some of the cash they have lost through coronavirus measures agreed with the government.
These include not cutting off households who are unable to pay their bills or providing emergency credit to those on payment meters.