Energy bills could rise by even more than first thought this winter, according to experts. With another change in the energy price cap coming in October, energy consultant Cornwall Insight has said that regular gas and electricity bill in England, Wales and Scotland could reach £3,615 in the new year - hundreds of pounds more than previous predictions warned.
Last month the company predicted that annual energy bills would rise to £3,244 from October and £3,363 from January, but has since told BBC Breakfast that a typical bill could now rise to £3,358 from October and £3,615 from January.
Soaring living costs and inflation rates at a 40-year high have left millions of households in the UK struggling to afford their monthly bills, and the news of further increases to energy costs are likely to cause even more worry to families. The price cap already rose by a whopping £693 to £1,971 back in April - a 54% increase.
With the new energy price cap for October being announced this month, here's everything you need to know about the energy price cap, how it is set and when we'll find out how much it is going up by.
Read more: Energy bills set to stay above £3,350 until at least 2024, experts warn
What is the price cap and how is it set?
The energy price cap limits the maximum amount suppliers can charge for each unit of gas and electricity you use, and sets a maximum daily standing charge (what you pay to have your home connected to the grid). So the word 'cap' is actually misleading, as there is no actual upper limit on what customers pay - you'll pay more if you use more energy and vice versa. The price cap only applies to standard and default tariffs, but not to those who are on a fixed-term energy deal.
The price cap is set by the UK's independent regulator Ofgem. To calculate it a number of factors are taken into account. The largest cost is the price energy suppliers are paying for gas and electricity, as well as the costs of maintaining energy infrastructure and suppliers' operating costs. Much of the recent impact has been down to the ongoing war in Ukraine and Russia's decision to drastically reduce the flow of its gas to Europe.
When will we find out the new price cap?
Ofgem will officially announce the next energy price cap on Friday, August 26, and it will apply to most variable tariff energy bills from October 1, 2022 to December 31, 2022. The regulator has changed its reviews, normally twice a year, to quarterly in order to respond more quickly to changes in wholesale energy prices, the biggest contributor to changes in the price cap.
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