The new energy price cap is looming that will see household bills for millions soar to record highs.
Regulator Ofgem announced that the price cap will rise to 54 per cent adding an extra £693, resulting in the average bill jumping from £1,277 to £1,971 a year. Those on prepayment meters will see an even bigger increase of £708.
Financial journalist Martin Lewis has continued to encourage people to stick with their current provider as there are have not been any deals or discounts on tariffs. The majority of fixed tariffs right now are above the price cap and Mr Lewis explains it is best to go onto a fixed tariff only if it is close to the price cap.
READ MORE- British Gas, SSE, E.on, Octopus Energy and more confirm new tariffs ahead of price cap hike
The increase comes after a concoction of issues ranging from a knock-on-affect from the pandemic, a higher demand and shorter supplies. You can read more about why prices are rising here.
The Money Saving Expert has added another warning as the Russia - Ukraine war will likely force the price cap up again in October by 40 per cent.
As Manchester Evening News reports, British Gas are one of the big six energy companies in the UK and supply millions of homes. Below is our guide to everything you need to know about the energy crisis if you are a British Gas customer.
How much will bills increase?
British Gas has confirmed their new tariff and have since been in touch with their customers to tell them that they will be putting their costs up to the maximum amount.
Based on a typical household, credit customers will pay £693 (excluding VAT) more on their annual energy bill, which will add around £58 per month. This figure is only an average, some customers may be quoted a higher figure based on their current usage, tariff and location.
The 'price cap' does not limit the amount of cash a company can ask for. If you use a lot of energy, you will have a higher bill compared to someone who doesn't
Prepayment customers will see an increase of £708 (excluding VAT) per year, or £59 per month. As mentioned above, price increases will be different for each household and vary depending on the amount of energy you use and how you pay.
Should I switch energy suppliers?
The short answer for the majority of people is - no.
Some companies might offer current customers a deal or discount on their tariff, like Octopus Energy has done. So if you're concerned about your energy bills, the first thing you should do is phone your supplier.
If your energy tariff is up for renewal or you’re thinking of switching, it’s a good idea to stay put, say Confused.com, as does MoneySavingExpert.
Which tariffs will be impacted?
British Gas customers who on the following variable tariffs will see an increase in the standing charges they pay in line with Ofgem's energy price cap increase:
- Safeguard Credit
- Safeguard PAYG v2
- Safeguard PAYG
- Flexi PAYG Mar 2023
- Standard PAYG
- Standard Credit
- Standard Variable
- Welcome to British Gas
- The Peoples Tariff
- Welcome Together
- Standard Variable HM
What about customers who pay by direct debit?
British Gas argue that people should increase their direct debit, in order to keep on top of the higher cost of energy prices.
The say this will make it more manageable when your direct debit is next reviewed, which happens twice a year. Customers can also make one off payments, increase their regular direct debit to the recommended amount shown in their online account, or increase to an amount that is suitable to them.
Will any customers not be impacted by the increase?
Customers who are currently on a fixed price tariff with British Gas will not see their tariff change for the duration of their tariff period. The only way you will see changes to what you need to pay would be if you chose to change your tariff, changed the way you pay or are affected by any government changes.
If your British Gas tariff is due to end soon, then you will see higher prices when moving onto your new tariff, due to the increased wholesale cost of energy.
What is British Gas doing to help its customers?
British Gas is offering a funding grant to those who are struggling to pay their energy bills due to the crisis.
They said a whopping £2 million has been invested into their funding grants to help keep vulnerable customers warm. Since that, they've added an extra £2 million to that.
Their fund will remain open until all of the money has been distributed to customers. To find out how to apply, click here. British Gas has also confirmed that it will be welcoming new customers, having stepped in as a Supplier of Last Resort for some of the energy suppliers that have recently stopped trading.
British Gas also offers customers payment plans that suit customers needs if they find themselves in difficult circumstances. The British Gas Energy Trust is an independently run charity which is funded by British Gas. The charity is able to help by advising on fuel debt, directing customers who are struggling to government grants, or - in some circumstances - allow grants for debt relief.
What advice has British Gas given to help those struggling?
British Gas has offered the following tips on how customers can become more energy efficient in order to get the most out of the gas and electricity they pay for:
- Do fewer, but fuller, loads of laundry.
- Use eco settings on your dishwasher or boiler in order to use less energy.
- Turn your appliances off at the wall rather than leaving them on standby.
- Just fill your kettle up with the level of water you need, rather than filling it all the way up.
- Switch to LED bulbs, as these last longer.
- Use your microwave more often or consider investing in a slow cooker - microwaves save energy due to being quicker and slow cookers are one of the most energy efficient kitchen appliances.
- Unplug your chargers as soon as your device is fully charged.
- Close your curtains at night as this helps your home to retain heat.
- Ensure your washing machine is set to no higher than 30°C.
- Upgrade your boiler - newer boiler models are more energy efficient.
