Households will be dealt another blow tomorrow when the cost of energy bills is hiked again. The government's £2,500 energy price guarantee comes into effect from October 1, increasing the average household bill by around £500, from the current cap of £1,971.
The price guarantee will be in place for two years, meaning Brits will be protected from the mammoth rises that were expected to come next year, with analysts previously suggesting average annual bills could hit as much as £6,000 under Ofgem's price cap.
As with the previous cap, the government's energy price guarantee is based on what an average household is likely to spend - but it only caps the standing charges and the price per unit. Energy bills will still be based on the energy used; so, in reality, households that use more energy will be facing bills much larger than £2,500.
READ MORE:
Prime minister Liz Truss is facing calls to clarify recent comments she made stating that no family would have to pay more than £2,500 under the price freeze. Adam Scorer, chief executive of fuel poverty charity National Energy Action, said: “It’s simply not true that bills are capped at £2,500 and it’s vital that people understand that. The energy price guarantee is not an all-you-can-heat buffet. If you use more, you will pay more."
Households will pay 34p for every unit of electricity and 10.3p per unit of gas they use from October 1. The typical household, which contains 2.4 people, uses 2,900 units of electricity and 12,000 of gas according to Ofgem’s calculations.
Despite the price hike, there are measures people can take to protect themselves from sky-high bills. Here are three things that households can do today, ahead of tomorrow's changes.
1. Take a meter reading
All households are being urged to take a meter reading today, September 30, to determine exactly how much energy they have used under the lower fees. An accurate reading on the last day of the month will mean that energy firms will not have to predict how much energy you have used before the new cap comes in.
That means your energy company can't charge you for energy used before October 1 at the higher rate.
Frazer Scott, chief executive of Energy Action Scotland, said: “This week, every household across the UK must make sure it submits a meter reading to their energy firm to avoid paying a penny more than they absolutely have to when prices go up on October 1."
Regulator Ofgem said people did not have to submit their readings straight away, but should make sure they take a photograph of their energy meters ahead of the change. After energy companies struggled with the number of people trying to submit readings during the last change in April, experts have reminded households that they have time to submit their readings for several days after Saturday.
People who have a smart meter installed in their home may wish to make a note of their readings, but they do not need to submit them to their energy company as their meters can be read automatically.
2. Check your appliances
Household appliances can suck up energy if they are used unnecessarily or incorrectly, which could add extra money to your energy bill. It's well worth checking your appliances today, to make sure you're not losing money when the higher rates come in.
Experts say appliances which produce heat or cooling are the most expensive to run. This includes ovens, central heating and space heaters, air conditioning and boilers. So you should make sure you're only using these appliances when necessary.
People can also take action by making sure the flow temperature on their condensing combi boiler is set as low as possible. Your hot water thermostat should be around 60 degrees, according to experts.
Turning down the thermostat to a lower, but still comfortable, temperature may also help. Experts recommend setting to 15 to 16 degrees at night and 18 to 20 degrees during the day.
Replacing incandescent bulbs with LEDs could also save you cash in the long run. Simple things like making sure your electronics aren't left on standby can really add up. Boiling kettles using only the water needed and using dishwashers and washing machines only when they are full may also help reduce your energy usage.
Research by comparison site Uswitch suggests a fifth of households (20 per cent) will only be able to cope with rising bills this winter by cutting back their usage. Some 53 per cent of households plan to turn appliances off at the wall to cut costs, while 46 per cent plan to turn the thermostat down and 35 per cent say they will reduce the number of times they use their oven, the data suggests.
3. Check what help is available to you
The government has put in place a series of support measures so that every single household will have some help with paying their bills. It's worth finding out exactly what help you are entitled to.
Every UK household is eligible to receive a non-repayable £400 discount on their bills this winter. It will be paid directly to energy accounts over six months in instalments of £66 and £67. Most companies will have sent out information to customers on exactly how the discount will work, so make sure you know how you'll get the payment. Some companies will provide the discount as a refund following payment of a bill, while others will take it off bills directly.
However, Ofgem has urged people to be wary of scammers. The £400 rebate automatically applies, so texts purporting to be from the government with links to 'claim' or 'apply' for the discount should be ignored.
The Warm Home Discount scheme, which is a one-off payment of £150 distributed by energy suppliers, will also open again this winter for vulnerable and low-income households. If you’re over the state pension age, you may be eligible for the Winter Fuel Payment scheme, which is worth between £100 and £300 during the winter months.
Information on all of the support available can be found on the Citizens Advice website here.
The second instalment of the government's £650 cost of living payment will also be paid in autumn, although a date has not been confirmed by the DWP. Cost of living payments are for people in receipt of certain means-tested benefits.
Anyone who can't pay their energy bill should talk to their supplier as soon as possible to find out what can be done to help. All the big energy firms have charitable hardship funds and grants that you may be eligible for if you’re struggling.
READ NEXT:
- Why you should never provide a false energy meter reading
- Liz Truss accused of misleading public over energy price guarantee as households warned bills COULD top £2,500
- Plumber issues warning to anyone who puts clothes on radiators to dry
- What to do if you cannot submit a meter reading to your energy provider today
- Only one energy firm provides adequate support to customers struggling with bills, Ofgem says
