Gas and electricity prices have increased by around 10 percent from October 1 as Ofgem’s price cap rise takes effect.
The move sees the average household energy bill rise by £149 a year, with the cap increasing from £1,568 to £1,717 annually for a typical duel-fuel household in England, Scotland, and Wales.
Almost 10 million households are being urged to take action, as they risk overpaying for their energy if they do not send meter readings to their supplier as soon as possible.
Suppliers who have not received meter readings base their bills on estimated usage, meaning households could be overpaying, while others may not be paying enough.
Citizens Advice said: “Call your supplier to give them the readings – or check if you can submit one on their website or app. If you can’t get to your meter, your energy supplier might be able to give you extra help to read or move your meter.”
What is the energy price cap?
The price cap sets a maximum price that energy suppliers can charge consumers for each kilowatt hour (kWh) of energy they use. Energy regulator Ofgem reviews and updates it every three months.
It does not limit total bills because householders still pay for the amount of energy they consume. So if a household’s usage exceeds the average, they’ll pay more than the cap.
From October 1, households on a standard variable tariff who pay for their electricity by direct debit will pay on average 24.5p per unit, with a standing charge of 60.99p per day.
For gas, the average will be 6.24p per unit with a standing charge of 31.66p per day.
Ofgem said rising prices in the international energy market, because of heightened political tensions and extreme weather events, were the main driver behind the decision.
While prices are still high, October’s price cap is significantly lower than during the peak of the energy crisis, which was fuelled by Russia‘s invasion of Ukraine in February 2022, driving up costs in an already turbulent market.
And in new hope for households, experts have forecast the cap to drop by one percent in January, with further decreases expected over the following two quarters.
Ofgem chief executive Jonathan Brearley has urged people to “shop around” and consider a fixed-rate tariff that could save money, adding that the regulator was working with Government, suppliers, charities and consumer groups to do “everything we can” to support customers.
Citizens Advice has said it was particularly concerned about households with children and young people and those on lower incomes, who were most likely to struggle with their heating costs.
Comparison site Uswitch.com calculated the average household on a standard variable tariff is expected to spend £135 on energy in October compared with £55 in September, because of a combination of higher rates and increased usage at the start of autumn.
Elise Melville, energy spokeswoman at Uswitch, said: “There are plenty of fixed energy tariffs that are cheaper than the October price cap and more are coming onto the market as competition increases.
“With the long-term outlook for energy prices uncertain, it’s worth taking the opportunity to lock in lower rates before the start of winter.”
